Health funds have told a Senate inquiry that a planned rebate cut could significantly increase premiums for older Australians, as insurers must set next year’s prices before Parliament votes on the change.
HBF, HIF and Australian Unity gave evidence to the inquiry into the Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026.
HBF CEO Lachlan Henderson told the inquiry that removing the higher rebate could cost an HBF-member couple in their 70s an additional $579 a year for gold cover and $493 for silver plus cover.
The health fund expects 271,000 of its members would be affected.
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Medibank, one of the country’s biggest health insurers, has estimated premium increases of 4 to 6 percent for members aged 65 to 69. Those 70 and over could see increases of 9 to 12 percent, once the age-based rebate uplift is gone.
Premium Increases Already Locked In
Insurers must send their proposed 2027 premiums to the government in November, before Parliament decides the bill’s fate.
HIF General Manager Amanda Bell said that work on the new premiums “will conclude on the 11th of November.”
Liberal Senator Anne Ruston said insurers are “very far down that [rebate-setting] process already,” adding that uncertainty from parallel legislation “is not helpful.”
HIF Chief of Strategy Troy Sheahan said standard premium modelling assumes membership stays constant and that insurers would only model cancellations and downgrades once the changes were settled.
Ruston noted the minister’s instructions allow insurers to revise applications if Parliament makes “material changes” after applications are due. Asked whether he had been told how that would work, Henderson said: “Not that I’m aware.”
HBF expects 2.3 percent of its affected members to cancel cover and 4.1 percent to downgrade—more than 17,000 people combined.
Henderson said if that pattern were repeated across other insurers, the number of people affected would be higher than the government’s projection of 44,313 fewer insured people nationally by 2028–29.
‘Silver Plus’ Cover Could be Abolished
A separate government proposal to abolish “silver plus” policies, which sit between Silver and Gold cover, would add further pressure.
HBF said nearly half its members hold silver plus and would have “nowhere to go” to maintain that level of cover.
HBF Product General Manager Blake Delcanho said members who were forced to move to “gold” would face new waiting periods for services not covered by their previous policies.
He said industry messaging “read as though they would have no rebate whatsoever”, when in fact only the extra rebate for people aged over 65 is being removed. He described the industry as “duplicitous”.
Henderson rejected the accusation, “We have not done this, and we don’t know of any other insurer who has.” HIF and Australian Unity also denied the claim.
HBF said 93 percent of its affected members earn $105,000 a year or less as singles, the lowest income tier.
HIF’s Bell said about 70 percent of insured Australians aged 65 and over earn $55,000 a year or less. “So this is not a subsidy for the wealthy,” she said.
