Senior Australians face health insurance double whammy

Senior Australians are facing a double whammy of health insurance cost rises, putting extra pressure on wallets during the cost-of-living crisis.  

Changes to the Private Health Insurance Rebate, coupled with high premium increases to policies that meet health needs of people over 65, mean senior Australians will be hit doubly hard by new health insurance changes.  

Currently the Private Health Insurance Rebate reduces premiums for people on low incomes by up to 24.288%, with reductions of up to 28.337% for those aged 65 to 69, and up to 32.385% for those aged 70 plus. But this week Health Minister Mark Butler announced that the higher Rebate categories for people over 65 will no longer apply.  

It’s estimated this will increase premiums by up to $640 per year, said industry body Private Healthcare Australia. 

Senior Australians are already dealing with high premium increases that came into force on 1 April. Analysis by health insurance comparison site healthslips.com.au found Gold policies have risen the highest, which will significantly impact those aged over 65. 

Average national increase, Hospital Cover 

• Gold 8.02%  

• Silver and Silver Plus 4.2%  

• Bronze & Bronze Plus 3.98% 

• Basic & Basic Plus 2.79% 

Average increase by state & territory, Hospital Cover 

• Gold: NSW 8.27%, QLD 8.2%, VIC 8.14%, WA 7.88%, SA 7.87%, TAS 7.48%, NT 6.95% 

• Silver and Silver Plus: NSW 4.86%, QLD 4.67%, SA 4.32%, VIC 4.22%, TAS 4.01%, WA 3.93%, NT 3.34% 

Source: Australian government data showing health insurance premiums on 1 April 2025 compared to 1 April 2026, Open policies, excluding corporate policies. 

Gold and Silver Plus tier policies are a popular option for senior Australians, since the likelihood of joint replacement surgery increases with age. According to Australian Orthopaedic Association data, the average age of hip replacements in Australia is 69.9, and 68.3 for knee replacements.  

By contrast, Basic tier policies, typically preferred by younger Australians, have had the lowest increase. Younger Australians stand to benefit if older members leave the health insurance industry. 

Average increase by state & territory, Hospital Cover 

• Basic & Basic Plus: NSW 3.49%, QLD 3.22%, SA 3.15%, TAS 2.91%, VIC 2.64%, WA 2.38%, NT 1.96% 

Source: Australian government data showing health insurance premiums on 1 April 2025 compared to 1 April 2026, Open policies, excluding corporate policies. 

Dr Rachel David, CEO of Private Healthcare Australia, said changes to the Private Health Insurance Rebate could drive many senior Australians to drop their cover, putting more pressure on the public health system.   

“About 39% of Australians with private health insurance earn less than $55,000 a year. This includes more than 900,000 older Australians who will be affected by the government’s proposed changes,” Dr David said. 

“Many of these people have annual incomes under $30,000 and many of them are in rural and regional Australia. While we recognise the government’s equity rationale for aligning Rebate rates for those over and under 65, the reality is this broad-brush approach will make private health insurance unaffordable for thousands of vulnerable Australians.” 

Media: for more health insurance premium insights from healthslips.com.au’s analysis, contact sophie.bartho@healthslips.com.au. 

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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