Health insurance costs will rise next week due to cuts in Government Rebate

Most Australians will pay more for health insurance next week due to a reduction in a rebate designed to make health cover cheaper.  

Cuts to the Private Health Insurance Rebate take effect on April 1 at the same time as most policies are increasing in price by an average of 3.7% – which adds up to a double hit in the pocket for health insurance policyholders.  

The Private Health Insurance Rebate, also known as the Government Rebate, currently reduces health cover premiums for Australians earning below $151,001 (for singles) or $302,001 (for couples, families and single parent households), with the reduction percentage determined by your age bracket. The Rebate can be claimed in the form of reduced health insurance premiums or as a tax refund at the end of the financial year. 

The government reassesses Rebate levels each year against inflation, to help keep health spending sustainable. It has remained at the same level since the pandemic began, but this year the Rebate will decrease – which means health insurance premiums will increase.  

From April 1, a single adult aged under 65 earning below $97,000 will have their Private Health Insurance Rebate reduced from 24.608% to 24.288%. For a single adult aged over 70 and earning $150,000, the Rebate will be reduced from 16.405% to 16.192%. 

Members Health, the peak body for not-for-profit and member-owned health insurers, said the Private Health Insurance Rebate reduction was concerning.  

“During a time of cost-of-living pressures, it is unfair to cut the Rebate and cost shift to consumers,” said Members Health CEO Matthew Koce.  

“Cutting the Rebate is hurting affordability for lower and middle-income earners. Given public hospital waits can stretch into the years, the last things anyone would want is for people to be forced into dropping their health cover.”  

In good news, from July 1, the income threshold brackets will increase, making more people eligible for the Rebate. The new thresholds mean single adults earning less than $158,001 and couples, families and single parents earning less than $316,000 in the 2025/26 financial years will be eligible for reduced premiums. 

Learn more about the Rebate changes to your income bracket here. 

Talk to your health insurer for advice on your Rebate eligibility, and contact an accountant if you need help understanding the financial implications.  

Trudie McConnochie

Writer and Researcher

Knowledge is power – that’s the guiding principle behind everything Trudie writes, and it’s a philosophy she brings to her work at healthslips.com.au. By breaking down complex information into easy-to-understand blogs and stories, she aims to empower Australians to make the best choices and an informed decision around private health insurance.

Trudie understands firsthand some of the complexity of private health insurance having moved to Australia from New Zealand and having to navigate a vastly different public healthcare system and health insurance structure.

Trudie holds a Bachelor of Communication Studies (journalism major) from the Auckland University of Technology.

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