Albanese Government Scraps Higher Private Health Insurance Rebates for Australians over 65

Why It Matters

The rebate cut raises daily costs for seniors, potentially increasing uninsured rates and sparking political backlash amid Australia’s cost‑of‑living crisis.

Key Takeaways

• Government eliminates extra private health rebates for Australians over 65.
• Seniors now pay uniform 24% rebate, losing up to 8% extra.
• Estimated cost increase about $1 per day per senior household.
• Policy may push low‑income elders to drop or underuse private insurance.
• No public consultation; adds GST to optional aged‑care fees, raising $250 million.

Summary

The Albanese government announced two senior‑focused policy changes: expanding the GST to cover optional aged‑care living fees and eliminating the higher private health‑insurance rebates that previously benefited Australians aged 65 and over.

Under the old scheme, all Australians received a 24 % rebate, with an additional 4 % for those 65‑69 and 8 % for those 70+. The new rule flattens the rebate to a uniform 24 %, effectively costing seniors about a dollar a day, and is projected to raise $250 million annually from the GST extension.

Minister Butler suggested only 0.4 % (around 44,000) might drop private cover, yet advocates warn low‑income elders could under‑use their policies because co‑payments become unaffordable. One speaker noted that one in four people over 50 lives in poverty, underscoring the timing amid a cost‑of‑living crisis.

The changes increase out‑of‑pocket expenses for vulnerable seniors, risk higher uninsured rates, and may fuel political criticism for lacking consultation, highlighting broader tensions over fiscal tightening and social equity.

Original Description

COTA Australia Deputy Chief Executive Officer Corey Irlam reveals the government has decided to scrap higher private health insurance rebates for anyone over the age of 65, and even more if you are over the age of 70.

“There’s a base rate of about 24 per cent that all people pay, and then if you’re between 65 and 69 you get an extra four per cent, and if you’re over 70 you get an extra eight per cent,” Mr Irlam told Sky News host Steve Price.

“They’re not getting rid of the rebate, but they are reducing it if you are over the age of 65.

“That’s going to hurt those people who have a significantly lower income.”