Proposed changes to the Australian Government Rebate on private health insurance

The proposed changes have not yet been passed by Parliament. We'll continue to monitor the progress of the legislation and update this page as new information becomes available.

If the legislation is passed, the proposed changes are expected to start from 1 April 2027.

There will be no impact to your rebate or health insurance premium before this date as a result of these proposed changes.

The Australian Government has proposed removing the higher rebate percentages currently available to eligible Australians aged 65 and over.

The rebate is not being removed entirely. It would continue to be based on income, but age would no longer increase the rebate percentage you receive for those aged 65 and older.

The Australian Government has stated the proposal is intended to modernise the Private Health Insurance Rebate by removing age-based rebate increases while maintaining income testing.

Savings from this change will be invested in aged care services, including more residential aged care beds and improved access to home care support services.

For more information about the proposed legislation, visit the Australian Government website.

The rebate is not being removed entirely. Under the proposed changes, Australians aged 65 and over would no longer receive the higher rebate percentage linked to their age. However, they would still be eligible for the Australian Government Rebate, with the rebate continuing to be income-tested and paid at a percentage as determined by their income tier. As proposed, these changes would commence on 1 April 2027.

If the proposal does not get passed through Parliament, there will be no change to current Australian Government Rebate arrangements.

The proposal would affect Australians aged 65 and over who:

• Hold private health insurance; and
• Earn up to $164,000 a year as an individual or up to $328,000 a year as a couple/family.

This change would not affect all people with private health insurance. The proposal is specifically related to how the Australian Government Rebate is calculated for Australians aged 65 and over. Medibank members who do not receive the Australian Government rebate may not be affected.

The impact will depend on your individual circumstances, including your age, income and current rebate entitlement.

The proposed changes are focused on removing the age-based rebate increases available to eligible Australians aged 65 and over.

The rebate would continue to be income tested for all eligible Australians.

Because the legislation has not yet been passed, and individual circumstances vary, we can't confirm future rebate entitlements at this stage.

The proposed changes are focused on removing the age-based rebate increases available to eligible Australians aged 65 and over.

The impact will depend on your individual circumstances, including your age, income and current rebate entitlement.

The proposed changes relate to the Australian Government Rebate and do not change the benefits, features or services included on your cover.

If the legislation is passed and your rebate entitlement is reduced, the amount you contribute towards your premium may increase from 1 April 2027. The amount will vary depending on your individual circumstances.

As the changes have not yet been finalised, we're currently unable to provide personalised estimates.

Not at this stage. Any future impact will depend on a range of factors, including your rebate entitlement, your individual circumstances and any future premium changes that may apply at that time.

We'll provide further information on this page if the legislation is passed and more details become available.

At this stage, nothing has changed and the proposal has not been passed.

Any future impact would depend on the final details of the proposal and individual circumstances. Members who have prepaid their cover do not need to take any action regarding the proposed changes now.

Medibank members will receive correspondence before 1 April 2027 confirming any changes to their premium amount.

There's nothing you need to do at this stage. We'll provide updates on our website if the legislation passes.

There's no need to make any decisions about your cover based on these proposed changes at this stage. The legislation has not yet been passed, and any changes would not take effect until 1 April 2027.

If you would like to review your cover at any time, we're here to help you understand your options.

Contact us

You can review your AGR using My Medibank.

Desktop:

1. Log in to your My Medibank account
2. Your AGR is listed on the left side (alternatively, click 'Manage policy' and then 'Australian Government Rebate')

Mobile:

1. Log in to your My Medibank app
2. Click on the 'Me' tab at the bottom right
3. View your 'Policy details'
4. You will see your AGR listed under the Loading, rebates & discounts section

If you have chosen the wrong income tier on your AGR application, your actual rate will be worked out by the ATO when you lodge your tax return, and you may need to repay any rebate you received above your entitlement at tax time. You can change your AGR by completing this form, visiting your nearest store or calling us on 132 331.

We understand that changes to the cost of health insurance can be challenging.

If the legislation is passed and you want to review your options, our team can help you understand your cover and explore solutions that may help you get the most value from your membership.

Contact us

We'll continue to update this page as more information becomes available.

You can also speak with our team if you have questions about your cover or visit the Australian Government Rebate page for information about how the rebate currently works.

If you have a health insurance policy and earn an income less than a certain amount, you may be eligible for the Australian Government Rebate (AGR) – a Government contribution to help with the cost of your private health insurance.¹

The Australian Government provides this rebate to make private healthcare more affordable for some Australians. It’s one of several incentives offered by the Government to encourage more Australians take out health insurance and keep it which can ease pressure on Medicare, our public health system.

¹ PrivateHealth.gov.au; Government Surcharges & Incentives; retrieved October 2024.

To be eligible to receive the AGR: 

• you need to hold a complying health insurance policy for Hospital, Extras or combined Hospital & Extras Cover 
• your taxable income for the current financial year needs to be $164,000 or less as a single; or $328,000 or less as a couple/family
• you need to be entitled to Medicare – meaning people on Overseas Health Cover aren’t eligible
• be a private health insurance incentive beneficiary.

Visit the Australian Taxation Office for more information around whether you’re eligible for the private health insurance rebate. 

Yes. The Australian Government Rebate applies to all resident Hospital and Extras products, so the rebate can be applied to both Hospital and Extras premiums. The rebate is calculated on your base premium.

The Australian Government Rebate and Lifetime Health Cover are two separate government initiatives that affect private health insurance premiums in different ways.

The Australian Government Rebate helps reduce the cost of eligible private health insurance premiums by applying a rebate to the policy's base premium.

Lifetime Health Cover is designed to encourage people to take out hospital cover earlier in life. If a person does not hold eligible hospital cover by 1 July following their 31st birthday, they may incur a Lifetime Health Cover loading, which increases the cost of their hospital cover premium.

While the rebate can reduce the base premium, it cannot be applied to or reduce any Lifetime Health Cover loading.