Did not passHealth & Care Introduced in the House of Representatives, 25 Jun 2026

A smaller rebate for people 65 and over was dropped

About 3.2 million older Australians with private health insurance would have got a smaller rebate from 1 April 2027. The rebate is the part of their insurance bill the government pays. The government said the saving would go to aged care, such as nursing homes and help for older people at home. The bill was dropped in October 2026.

Official name: Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026

Who it affects

• People aged 65 and over with private health insurance: Their rebate would have dropped to the same rate as younger people on the same income, so their premiums would have gone up. A premium is what you pay to keep your cover. Since the bill was dropped, their rebate stays as it is.
• People under 65 with private health insurance: Nothing would have changed for them.
• High earners in the top income tier (income band): They already get no rebate at any age, so nothing would have changed.
• Health insurance companies: They would have applied the new, lower rebate to premiums paid for cover from 1 April 2027.

Rebate helps pay private cover

Private health insurance helps pay for treatment in a private hospital and for extras like dental and physio. You do not have to have it. Medicare still gives everyone free treatment as a public patient in a public hospital.

To get more people to buy private cover, the government pays part of the premium. This is called the private health insurance rebate. Most people get it as a discount on their bill from the insurer. Others claim it at tax time.

The rebate started in 1999 as a flat 30% for everyone. In 2005 a higher rate was added for older people. Since 2012 the rebate has also depended on your income, so people who earn more get less or nothing.

Today the rebate depends on two things, your age and your income. The government said this is too complicated. It also said older people would mostly keep their cover anyway, so the extra money was not doing its job.

How the rebate works now

Income is split into four tiers. For a single person, the base tier is up to $105,000 a year. Tier 1 is $105,001 to $123,000. Tier 2 is $123,001 to $164,000. Tier 3 is above that, and gets no rebate.

For families the limits are about double. The base tier for families is up to $210,000.

Here are the rates from 1 July 2026 for someone in the base tier. Under 65 you get 24.118% of your premium paid for you. Aged 65 to 69 you get 28.139%. Aged 70 or over you get 32.158%.

The same pattern runs through tier 1 and tier 2. At every income level, a 70 year old gets a bigger rebate than a 40 year old on the same income.

One rebate rate for all

Part 1 of the bill would have changed the Private Health Insurance Act 2007. It would have removed the separate, higher rates for people aged 65 and over. Older people would have had their rebate worked out the same way as people under 65.

The income tiers would have stayed the same. The yearly update of the rates and income limits would also have stayed. Only the age bonus would have gone.

Say you are 72, single and earn $60,000 a year. Today about 32% of your premium is paid by the government. Under the bill it would have dropped to about 24%, the same as a 30 year old on $60,000.

The government said the average extra cost for affected older people would be around $250 a year, or less than $1 a day. People with more expensive policies could have paid more.

A couples rule would have gone

There is a special rule for policies that cover more than one person. If an older person leaves the policy, for example after a break-up or a death, the higher rate could keep going for the other person on it.

Since the higher rate for older people was to be removed, this rule would no longer have been needed. The bill would have deleted it.

Age discrimination law tidy-up

Part 2 would have made a small change to the Age Discrimination Act 2004. That law lists some rules that are allowed to treat people differently by age. The rule about couples is on that list.

Because the bill would have deleted that rule, its spot on the list would have gone too. This change would not have affected anyone in practice.

The government's reason

Private health insurance uses a system called community rating. Everyone pays the same price for the same policy, whatever their age or health. That means younger, healthier members already help cover the higher claims of older members.

The government said older people are more likely to keep their cover and claim more. It said the extra rebate rarely changes whether they stay insured.

It expected about 44,000 fewer people aged 65 and over to have cover by 2028 to 2029 than if nothing changed. That was 0.4% fewer insured people than expected.

The government said the savings would go into aged care. Its plans included money for new and fixed-up nursing homes and 20 more specialist dementia units. Dementia is an illness that damages memory and thinking. The plans also included more help through the Support at Home program, which helps older people keep living at home.

Taken off the Senate list

The whole bill would have started on 1 April 2027. It would have applied to premiums paid for cover from that date, whether you got the rebate from your insurer or at tax time.

The bill was brought into the House of Representatives on 25 June 2026. The House passed it on 16 September 2026. It went to the Senate, Parliament's second house, the next day.

A Senate committee, a small group of senators, was asked to report on it by 7 October 2026.

The Senate never voted on it. On 14 October 2026 the bill was dropped from the Senate's list of business. It will not become law in this form. The extra rebate for people 65 and over stays as it is.

How they voted

Its journey through Parliament

Official sources

• Bill page on aph.gov.au
• Text of the bill
• Explanatory memorandum
• Bills Digest

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