More than one in six Australians aged 61 and over say they might cancel private health insurance if the federal government’s planned rebate cut for older members goes ahead, according to new iSelect research.
The comparison service commissioned Pureprofile to run an online survey of 1,519 Australians in October. Among respondents aged 61 and over, 17% said they might cancel their cover, 20% would consider downgrading and 9% would look at reducing or removing extras they were not using. iSelect did not disclose how many respondents were in that age group.
Overall, 56% agreed people aged 65 and over should receive cheaper private health insurance than younger Australians. Support was strongest among Baby Boomers at 66%, followed by Gen X (54%), Millennials (47%) and Gen Z (40%). Almost half of Boomers (49%) said they would not feel confident relying solely on the public system without private cover.
“Young working Aussies, who help fund many services through their income tax, understandably want to see the burden spread more evenly. At the same time, older Aussies on pensions are worried about how changes could affect their ability to cover rising costs,” said Sophie Ryan, iSelect’s public relations manager.
The Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026 would remove the age-based rebate tiers from April 1, 2027. At the base income tier, the rebate for those aged 65 to 69 would fall from 28.139% to 24.118%, and for those 70 and over from 32.158% to 24.118%, according to the Department of Health, Disability and Ageing. The department puts the average extra cost for affected members at $252 a year. The government expects to redirect about $3 billion over four years to aged care.
The Senate voted 38-23 on Wednesday to remove the bill from its notice paper. Health minister Mark Butler reintroduced identical legislation in the House of Representatives the next day. Greens leader David Shoebridge has said his party would support the bill if pensioners were exempt, and its future was unclear when Parliament rose Thursday.
iSelect cited health department modelling showing 78,000 older Australians could drop cover by 2029-30. Insurance Business’s recent coverage of freedom of information documents found the government’s published figure of 44,000 applies to 2028-29 only, with the cumulative total reaching about 78,000 the following year, and that the department cautioned the estimates are uncertain. Private Healthcare Australia projects 62,000 would drop cover, while Catholic Health Australia modelling suggests the larger shift would be downgrading, with about one in five affected over-65s changing their level of cover within three years.
The Australian Medical Association (AMA) has warned the changes could add pressure to public hospitals and lengthen waiting lists, iSelect said, citing an AMA release.
The same reporting points brokers to downgrades as the likelier pressure point. A move from Gold to Silver hospital cover can remove joint replacements and cataract surgery, procedures older clients may be most likely to need, and Private Healthcare Australia estimates a member aged 70 or over on Gold could face about $807 a year extra, or $1,614 for a couple, once the rebate cut and next year’s premium rise combine. Funds are expected to lodge 2027 premium applications by mid-November, before the Senate is likely to vote.
Insurance Business has also reported that a cover conversation brokers are missing involves the cost of exiting and rejoining: under Lifetime Health Cover rules, people who let hospital cover lapse can face a loading of 2% for each year without cover, up to 70%.
iSelect’s survey points the same way. “Right sizing your policy, rather than cancelling it completely, could be a good option. Health insurance isn’t one-size-fits-all. People’s health needs and financial circumstances change throughout their lives. We generally recommend looking at your policy once a year in any case to make sure it reflects your current needs,” Ryan said.
The survey measured stated intentions rather than actual behavior, and the changes remain subject to legislation passing Parliament.
