8 in 10 Australians back private health insurance reform

Only 20% of policyholders want the current insurer Medicare and patient fee mix retained.

About 80% of Australians with private health coverage expressed support for changes to private hospital funding, a Money.com.au survey revealed.

More than half of policyholders prefer any model that reduces out-of-pocket costs, whilst 27% support the Federal Government’s proposed Activity-Based Funding (ABF) model. 

This proposed system would pay private hospitals a standard price for treatments based on the volume and type of care provided. 

Currently, only 20% of respondents believe the existing funding mix of insurer contracts, patient fees, and Medicare benefits should remain.

The survey highlights a clear divide in how different age groups view healthcare changes. Baby Boomers are the strongest supporters of reform in principle, with 64% backing any model that lowers gap fees. 

Gen X respondents are the most likely to support the specific government ABF proposal at 27%. 

In contrast, younger Australians are more inclined to keep the current system, with 46% of Gen Z and 34% of Millennials supporting the status quo.

The Federal Government's draft reforms involve the introduction of a Private National Efficient Price (PNEP). This national benchmark is intended to guide pricing and contract negotiations between insurers and private hospital operators. Whilst the framework is still in the consultation phase, any final changes are expected to roll out starting in July 2026.

Industry experts warn that reform must be balanced with commercial realities to protect patients from rising costs. 

Chris Whitelaw, General Manager of Health Insurance at Money.com.au, noted that without proper safeguards, private hospitals might introduce higher gap fees to recoup costs under an activity-based model. 

These concerns come as health insurance premiums face upward pressure, with industry modelling suggesting an average increase of nearly 4% this year due to health inflation.