EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Ageing
Private Health Insurance Act 2007
Private Health Insurance (Incentives) Amendment Rules (No. 1) 2026
Authority
Section 333-20 of the Private Health Insurance Act 2007 (the PHI Act) authorises the Minister for Health and Ageing to, by legislative instrument, make specified Private Health Insurance Rules providing for matters required or permitted by the corresponding Chapter, Part or section to be provided; or necessary or convenient to be provided in order to carry out or give effect to that Chapter, Part or section.
The Private Health Insurance (Incentives) Amendment Rules (No. 1) 2026 (the Amendment Rules) amends the:
- Private Health Insurance (Incentives) Rules 2012 No.2 (the Incentives Rules).
Under subsection 33 (3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
Purpose
The Amendment Rules make consequential amendments to the Incentive Rules as a result of amendments to the Private Health Insurance Act 2007 which allows for the listing of additional criteria an insurer must satisfy when registering a participant in the Premiums Reduction Scheme (PRS) and when making a PRS claim.
Background
The Australian Government reimburses private health insurers (insurers) for the portion of health insurance premiums that are reduced on behalf of the consumer by the insurer under the PRS.
Some elements of the registration and claims processing system for the PRS have been administered inconsistently with the requirements of the PHI Act.
The Amendment Rules will support the validity of registrations and claims for payment by detailing the relevant requirements for each.
Details and Effect
The Amendment Rules commence on 1 April 2026.
Item 1 – Rule 6 Registration as a participant and Rule 7 Requirements for the determination of a claim
This item repeals the Rule 6 and substitutes a new Rule 6 to include clause 2 that lists the additional criteria under paragraph 23-16(1)(b) of the PHI Act the insurer must satisfy in order to register a participant in the Premiums Reduction Scheme, being that the applicant is an eligible person.
The substitution inserts Rule 7 which lists the additional criteria under paragraph 279-11(1)(b) of the PHI Act the insurer must satisfy in relation to making a claim for payment. The new Rule states that the participant for which the claim relates to must be registered as a participant in the scheme and that the registration has not been revoked.
The inclusion of criteria in the Incentives Rules is not intended to impose additional requirements for participant registration than already specified in the PHI Act, but rather to specify system checks that are able to be undertaken by the electronic system automatically. This is required to facilitate the use of electronic systems in assessing registrations.
Consultation
The integrity of the Premiums Reduction Scheme payment system is also supported by
post-payment compliance activities conducted by Services Australia and the Department of Health, Disability and Ageing. These amendments have been developed in consultation with Services Australia.
Authority: Section 333-20 of the Private Health Insurance Act 2007
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Private Health Insurance (Incentives) Amendment Rules (No. 1) 2026
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The purpose of the Private Health Insurance (Incentives) Amendment Rules (No. 1) 2026 (The Amendment Rules) is to amend the following instruments:
- Private Health Insurance (Incentives) Rules 2012 No.2 (the Incentives Rules).
The Amendment Rules make consequential amendments to the:
- Incentives Rules is to include additional criteria for participant registration in the Premiums Reduction Scheme (PRS) and the determination of PRS claims.
Human rights implications
Some aspects of the Amendment Rules engage Article 12 of the International Covenant on Economic, Social and Cultural Rights, the right to health, by assisting with the progressive realisation by all appropriate means of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.
Private health insurance regulation assists with the advancement of these human rights by improving the governing framework for private health insurance in the interests of consumers. Private health insurance regulation aims to encourage insurers and providers of private health goods and services to provide better value for money to consumers, to improve information provided to consumers of private health services to allow consumers to make more informed choices when purchasing services and requires insurers to not differentiate the premiums they charge according to individual health characteristics such as poor health.
The amendments to the Rules do not change the overall private health insurance regulation’s support for human right to health.
Consultation
Services Australia, the Australian Prudential Regulation Authority, the Australian Taxation Office, Private Healthcare Australia and Members Health Fund Alliance.
Analysis
The amendments relating to criteria for participant registration in the PRS and the determination of PRS claims are entirely administrative in nature and therefore do not engage human rights.
Conclusion
This disallowable legislative instrument only engages human rights to the extent that it maintains current arrangements with respect to the regulation of private health insurance. Therefore, this instrument is compatible with human rights because these changes continue to ensure that existing arrangements advancing the protection of human rights are maintained.
Paul McBride
Assistant Secretary
Private Health Strategy Branch
Portfolio Strategy Division
Systems Strategy Group
Department of Health, Disability and Ageing