Private Health Insurance Rebate update

The proposed cut to the Private Health Insurance (PHI) Rebate has angered older Australians, with many concerned about their ability to maintain their cover and their access to private health care. 

No issue has united the NSA community more.  

In a poll of more than 5,400 Connect readers, 91% opposed the rebate cut to fund aged care reform and more than 3,000 people have joined our Health Costs campaign in less than six weeks. 

Before the proposal was announced by Aged Care Minister, Sam Rae, National Seniors Australia (NSA) had already undertaken research and raised your concerns around private health insurance affordability (and value) to help bring about an independent review into the private health system. In fact, we had consistently called for an increase, not a decrease in the rebate for lower income seniors in previous budget submissions! 

We know from our past NSA surveys that out-of-pocket costs and the cost of private health insurance are significant concerns for older people. That is why we continue to call for a Productivity Commission review of the entire private health system, to lift the lid on rising health costs. 

When the Treasurer, Dr Jim Chalmers, confirmed the government’s intention to cut the rebates in the 2026 Federal Budget, NSA was well armed with the necessary evidence to support our call on parliament to reject the proposal – which we did!  

Our report on private health insurance has been referenced as one of the few sources of public data on PHI take-up among older people (and was recently referenced in Senate estimates!). 

We continue to reinforce our call to reject this proposal by being involved in important political discussions and leading equally important public conversations.  

What is NSA doing to advocate against the cuts to PHI?  

1. Ongoing meetings with Federal MPs and Senators at Parliament House to put forward your views directly – we have the ear and support of Senator Anne Ruston and Independents such as Rebekha Sharkie, who are fierce opponents of the PHI cuts. We have also met with representatives of the Australian Greens to put our case to them. We will also be sending a letter to every Federal MP and Senator outlining our opposition to the cut. 

2. Participating in national TV, radio, and online media interviews – adding public pressure to the political work we’re doing behind closed doors.  

3. We developed our Private Health Insurance Rebate estimator to show the likely impact on your current policy and to encourage people to sign up to the campaign.  

4. To complement our campaign sign-up process, we have also created a petition to give people another way to show their support for our campaign – there’s weight and power in numbers! You can help spread the word by sharing this with your friends and family easily by forwarding our Facebook post here. 

5. We are working with an alliance of organisations, including private hospitals and insurers, to oppose the change culminating in a joint letter to the Prime Minister and Minister for Health. The letter outlines our shared concerns for older people and the private and public health systems that support them. 

6. We have also put out calls to the NSA community for case studies to show the real-life impact of the cut on older people. Media will often only run a story with real life case studies. If you are willing to get involved in media, please email us at policy@nationalseniors.com.au

As NSA CEO, Chris Grice, has said publicly, “Older Australians have paid premiums for decades, in some cases their whole working lives. They’re already struggling to afford it and doing everything possible to keep it. 

“The cuts could push people to downgrade their cover, potentially leaving them underinsured when they need it most. And at the same time add pressure to an already stressed public hospital system.” 

Helping to strengthen our case and reinforce the need for the Productivity Commission to conduct a full review of the private health system has been your views and your experiences, which you have continued to share with NSA since the proposal was announced. 

Personal stories  

As noted above, the impact of the proposed change is best shown via personal stories. Two members have kindly agreed to share the following with us. 

Mary Parsissons, an 83-year-old pensioner, has been paying PHI since she began working as a nurse at 16 years-old. Mary, like many, values the choice private health cover provides but wonders how she’ll manage increased out-of-pocket expenses on top of increased living costs that continue to squeeze her limited budget. 

“I’ve been paying Private Health Insurance for almost 70 years. I’ve always valued it and the choice of hospitals and doctors it’s provided – it’s always been there when I’ve needed it,” Mrs Parsissons said.  

“I’ll do what I can to keep it, even with the rebate cuts, but this will mean cuts to other necessities. It’s worrying because it’s getting increasingly difficult to keep up with cost-of-living pressures – something will have to give.”  

It’s not only pensioners who are concerned about the impacts. Anne Drane, a 78-year-old retiree, has also been paying PHI for decades and relies on it heavily to assist with ongoing medical expenses for a chronic lung condition. 

“My health condition is permanent and requires regular medical appointments. Without private health cover, I would become reliant on the public system. This could delay my treatment and add another person to a system that is already buckling under the strain,” Mrs Drane said.  

“Letting go of private health and losing the security it provides isn’t a decision anyone would take lightly but it is a decision some older Australians may be forced to make.” 

Mr Grice said experiences such as Mary and Anne’s reinforce the need to retain the higher rebate and for the Productivity Commission to conduct a full review of the private health system to ensure Australians get value for money from private health.  

“Again, before these cuts were announced, there was a growing discourse about the unaffordability of private health. NSA has recommended the Productivity Commission conduct an in-depth independent inquiry into the private health system,” he said.  

“NSA is calling on the parliament to reject the cuts as proposed and encourages older Australians to join our Health Costs campaign to show support for a better health system.”  

Estimate the real cost of the cut to the rebate 

To help people can see how the cut to the rebate could impact their current policy, NSA has  

released an online health insurance rebate cut estimator.  

The Government says that the average increase from the cut will be $250 a year but in reality this could be more than $1,000 a year for a couple with Gold cover.  

More than 2.6 million Australians aged 65 and older have hospital cover. More people have Gold plans which cover surgeries including joint replacements. For these people, the annual impact will be much higher than the average.  

Around 27,000 people have visited the NSA tool since the cuts were announced last month.