Australia’s Department of Health, Disability and Ageing has forecast that the number of older Australians dropping private health insurance under the government’s proposed rebate changes could nearly double within a year of implementation, surpassing the figures regularly cited by the government.
Official projections obtained through a freedom of information request indicate that while the government has commonly referenced an estimated 44,000 policy cancellations among Australians aged 65 and over by 2028-29, this figure is expected to rise to approximately 78,000 by 2029-30. The department cautions that these numbers reflect that the initial impact of the policy will grow over time, as older individuals are progressively more likely to downgrade or exit their private health coverage due to the reduced rebate.
The department’s modeling notes that the uptake of health insurance is predicted to continue growing overall, but at a slower pace than it would without the rebate reduction. It also explains that the 44,000 estimate is used publicly because the policy’s effects are assumed to be more moderate within the first two years of its introduction, with longer-term forecasts subject to increasing uncertainty related to behavioral, economic, and policy variables.
The rebate cut, which excludes higher premium support for Australians over 65, has drawn significant concern from several state health ministers. Officials from New South Wales, Queensland, and Tasmania have warned that the policy is likely to place additional strain on public hospital systems, which are already operating under intense pressure. Queensland’s Health Minister referenced a government-commissioned report projecting a loss of around 100,000 people holding hospital cover by 2032 due to the rebate changes, potentially increasing demand on public health facilities. The New South Wales Deputy Premier also noted the potential for more senior citizens to seek hospital care through the public system, resulting in substantial cost implications.
Recent data published by the Commonwealth health department suggests the rebate cut is already affecting older Australians’ private health insurance participation. Between June 2025 and June 2026, some 14,032 policies held by those aged 65 and over were cancelled, comprising nearly three-quarters of the total 19,561 cancellations across all age groups. This led to a 0.7 percent drop in the participation rate for this demographic during the period.
The continuation of the federal government’s health rebate policy remains under examination, with a Health Ministers’ Hearing on Medicare and Private Health Insurance Reform, originally scheduled for July 3, having been postponed twice and now set for October 12. Opposition from the Coalition and conditional support from the Greens indicate ongoing debate regarding potential amendments ahead of parliamentary consideration.