Private health insurers are warning that proposed Federal Government changes to the private health insurance rebate for older Australians could place regional private hospitals under significant pressure, with concerns some facilities may struggle to remain viable if large numbers of seniors drop or downgrade their cover.
Peak industry body Private Healthcare Australia said the changes would reduce the rebate currently available to many Australians aged over 65, increasing out-of-pocket costs for older policyholders and potentially forcing thousands to reconsider whether they can afford private cover.
The proposed changes form part of the Albanese Government’s broader budget measures and would remove the higher age-based rebate rates currently available to Australians aged 65 and over, aligning them with the standard rebate available to younger Australians in the same income tier. The changes are expected to begin from April 2027, subject to legislation.
According to Private Healthcare Australia, more than three million Australians would be affected by the changes, including more than 400,000 pensioners who currently hold private health insurance.
The organisation said older Australians on low or fixed incomes could face steep premium increases as a result. It estimates Australians aged 70 and above with Gold hospital cover could see premiums rise by as much as 21 per cent from next April, equivalent to around $807 a year for an individual or $1,614 for a couple.
“Regional communities will be among the hardest hit if these changes proceed,” said Dr Rachel David.
“In many country towns and regional centres, the local private hospital is not a luxury, it is an essential part of the health system.
“If activity drops significantly because older Australians can no longer afford their cover, some private hospitals will struggle to remain viable. That would mean fewer local healthcare options and more pressure on already stretched public hospitals.”
Current government rebate settings provide higher support for older Australians, with people aged 65 to 69 receiving a higher rebate than those under 65, and Australians aged 70 and over receiving the highest rebate tier.
Private Healthcare Australia said the Government has forecast that around 44,000 older Australians will leave private health insurance as a result of the changes, though the assumptions behind that modelling have not been publicly released.
Health funds are also concerned about a potentially larger group of older Australians who may not cancel their cover altogether but instead downgrade to cheaper policies offering fewer services.
“That could mean many older Australians losing cover for procedures such as joint replacements or mental health treatment, which are included in Gold policies,” Dr David said.
“Patients who can no longer access treatment through the private system may instead end up joining public hospital waiting lists, creating additional strain on regional public hospitals already under pressure.”
Private Healthcare Australia said it had identified a number of regional private hospitals where more than 70 per cent of privately insured patients are aged over 65, making them particularly exposed to any drop in senior participation.
Hospitals identified as being of concern include:
In Queensland, Eden Private Hospital, Nambour Selangor Private Hospital, St Stephen’s Hospital, Hervey Bay Surgical Hospital and Noosa Hospital.
In New South Wales, Forster Private Hospital, Border Cancer Hospital, Mayo Private Hospital, Toronto Private Hospital, St Vincent’s Private Hospital Lismore, Figtree Private Hospital, Berkeley Vale Private Hospital, Nowra Private Hospital, Port Macquarie Private Hospital and Shellharbour Private Hospital.
In Victoria, Beleura Private Hospital, Maryvale Private Hospital and Mildura Health Private Hospital.
Dr David said there were also concerns for Tasmania, which has one of the oldest populations in the country.
“In some areas, losing local private hospital capacity could force patients to travel many hours for surgery, rehabilitation or specialist treatment,” she said.
“These hospitals support local jobs, local specialists and local healthcare services. Once services are lost in regional Australia, they can be very difficult to restore.
“We are urging the Government to carefully consider the unintended consequences of these changes before the Budget is handed down.”
Should Government policy not have outcomes validated and be robustly tested for unintended and flow on-consequences before release?
Policy development would reasonably be expected to include collaborative discussion with key stakeholders, public release of modelling figures and consideration of wider social and economic impacts.
Are these consequences (pressure on public system, financial stress etc) in fact known and this is just another example of the current government’s attitude to and value of older Australians?
This government appears to forget they govern for all Australians.
Issues affecting older Australians also affect younger cohorts – eg caring for older family members and their health needs, how the public system blow out of already stretched waitlists will affect everyone and potentially increase the numbers of ‘bed block’ elderly patients unable to be discharged due to a lack of residential aged care places (this issue in itself a failure of forward thinking policy development over many years).
As of 31 March 2026, the AEC website shows 18,251,479 enrolled voters – the information section shows Elector Count by Division, Age Groups and Gender for all States/Territories – cohort numbers for those caring for elderly and the elderly remain a large cohort of voters.
Would in fact raising the rebate for seniors encourage a responsible level of health insurance and overall achieve better health outcomes, a higher overall economic return and better social cohesion?
Albanese seems to be intent on causing a war on older people and causing intergenerational disharmony. Probably as a distraction.
His constant comments about how ‘rich’ older people enjoy privelege at the expense of the younger generation is not true and not helpful.
Most of the older generation I know live simple lives without expecting too much. They have fought in wars, worked really hard and saved, brought up children, didn’t have the luxuries of modern life, didn’t have employer super gaurantees and paid private health their whole lives. Certainly didn’t have ‘investment’ properties or share portfolios.
I am a die hard labor voter and I am so disappointed in Albanese’s war on older generations.
We shouldn’t forget either that the ‘grandfather’ clause in the negative gearing of properties (what a scam! ) will be an advantage to politicians who have mulriple properties including Albanese who has 9 I believe.
It is imperative that we bring generations together not divide them.