A survey finding that 42% of West Australians aged 18 to 54 would consider helping an older relative pay for private health insurance (PHI) is a market signal worth examining closely. It indicates that PHI retention decisions for the 65-plus cohort are migrating to the household level – and that those conversations are already underway without broker involvement.
The research, conducted by CoreData on behalf of Perth-based insurer HIF in July 2026, surveyed 501 Western Australian residents aged 18 to 74 who hold private health insurance or intend to purchase cover within 12 months. The findings reveal a sharp mismatch between awareness and concern: only 21% of respondents aged 18 to 54 said they knew about the proposed rebate changes before taking part in the survey, yet once informed, 66% believed the changes were unfair for older Australians, 71% said they would add pressure to the public hospital system, and 59% said the changes would negatively affect them or someone in their family.
HIF CEO Greg Morris framed the implication plainly. “The fact that more than four in 10 younger and middle-aged West Australians say they would consider helping a parent or grandparent pay for their private health insurance demonstrates how deeply these reforms could impact families and the importance people place on the health and wellbeing of their loved ones in later life,” he said.
The Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026 was introduced by Health Minister Mark Butler on June 25, 2026. If passed, the proposed changes would take effect from April 1, 2027, and remove the age-based uplift to the PHI Rebate. For example, the base-tier rebate for people aged 70 and over would fall from the current 32.158% to 24.118%, the rate applying to people under 65, per the Department of Health, Disability and Ageing.
The government has framed the reform as an issue of intergenerational equity. At the National Press Club on April 22, 2026, Butler said the existing arrangement means “two households on the same income receive different levels of government support, based only on their age,” describing the 2004-era policy as one that is “harder to defend” in 2026. The government estimates the rebate changes will save about $3 billion over four years, with the broader budget funding additional aged-care beds, Support at Home packages, and other measures for older Australians. Butler has also argued that older Australians are less likely to respond to higher premiums by dropping private health insurance, with the Office of Impact Analysis (OIA) modelling a 0.4% reduction in PHI participation in 2028-29 compared with the status quo, while the overall number of people covered is still expected to grow.
The industry disputes both the modelling and the design. Members Health Fund Alliance, the peak body for more than 20 not-for-profit and member-owned funds, has warned the changes could prompt older Australians to downgrade or drop private cover. Its analysis estimates the changes would represent an average effective premium increase of around 9% for affected members, with some facing increases closer to 12% on top of normal annual premium rises. Separate analysis by Private Healthcare Australia found some older couples could face annual increases of more than $1,600 once the proposed rebate change and expected premium increases are combined. Members Health has also cited independent actuarial modelling by Finity Consulting, commissioned by the Federal government, estimating that the rebate changes could reduce Commonwealth expenditure by around $482 million while shifting approximately $547 million in additional costs onto public hospitals.
For brokers, the more commercially significant risk may be client downgrading rather than outright cancellation – a possibility that would compound an existing shift away from Gold cover. Gold hospital cover has declined as a share of hospital policies since product tiers were introduced in 2019, with Department of Health statistics showing a drop of more than 20% in the number of people covered by Gold-tier policies in just under six years. The price of Gold cover has also increased by more than 70% over the past five years, according to CHOICE research cited by ABC News, while some individual Gold policies faced premium increases of up to 25% in the April 2026 round.
According to the Australian Medical Association’s (AMA) 2025 Private Health Insurance Report Card, 68.4% of private hospital treatment policies no longer cover all types of care. The same report found that in June 2025 there were 360,000 fewer Gold-tier policies than at the start of the pandemic, with 743,000 Australians covered by Gold-tier policies despite an overall increase of 640,000 hospital policies over the same period. A policyholder who moves from Gold to a lower tier may remain privately insured while losing cover for treatments excluded from the lower-tier policy. Members Health has argued that downgrade behaviour was not captured in the government’s modelling of the proposed rebate changes, potentially understating the impact on private cover and public hospital demand – an omission the OIA acknowledged could materially affect those estimates.
The legislative clock creates a specific planning constraint. The Senate Community Affairs Legislation Committee is due to report by October 7, 2026. With the Coalition opposing the Bill, the government will need support from the Greens and/or crossbench senators to pass it. As of early September, independent senators David Pocock and Lidia Thorpe had not declared their positions, while Senator Jacqui Lambie and One Nation had indicated opposition. The Department has not yet published the 2027 premium-round timetable, but insurers are expected to lodge their premium applications by mid-November 2026 – meaning funds may need to price for the potential membership impact before the Senate has voted. That pricing pressure compounds an already elevated environment: the April 2026 round carried a weighted average increase of 4.41%, the highest since 2017, against a 5% increase in medical and hospital service costs in the previous financial year, per the Department of Health, Disability and Ageing.
Policyholders who have not reassessed their cover in several years may find that their existing level of cover no longer aligns with their needs. For clients whose needs can be met by Silver or Silver Plus, moving to a lower tier could reduce premiums and offset some or all of the additional cost associated with the rebate change, without requiring them to leave private health insurance. However, the lower tier may carry restrictions or exclusions for treatments covered under Gold. Brokers should also consider the potential consequences of a prolonged lapse. Under Lifetime Health Cover rules, people who allow their hospital cover to lapse can incur a loading of 2% for each year without cover when they rejoin, up to a maximum of 70%, per the Department of Health, Disability and Ageing – making the cost of exiting and later returning to private hospital cover potentially prohibitive.
The HIF survey’s most actionable finding remains the awareness gap. Most working-age Australians do not yet know what the proposed changes are. The household-level financial conversations that will shape whether older Australians retain, downgrade, or exit cover are already beginning. For brokers, April 2027 is not a distant policy date – it is the outer edge of a review window that is closing now.
