Insurance and Diversified Financials Federal Budget 2026-27 – Our take on likely impacts to our coverage

Research evidence excerpt

Insurance and Diversified Financials Federal Budget 2026-27 – Our take on likely impacts to our coverage

Siddharth Parameswaran AC Asia Pacific Equity Research

(61-2) 9003-8629 13 May 2026 J P M O R G A N

siddharth.x.parameswaran@jpmorgan.com

Implications by Subsector

1. Health Insurance & NDIS (MPL, NHF)

• Removal of the PHI Rebate age-based uplift (from 1 April 2027) — savings of

$3.0 billion over four years from 2026-27 and $1.0 billion per year ongoing. JPM

comment: The Government had pre-flagged this and we had written about this

earlier. The current age-based uplift currently provides higher rebate percentages for

policyholders aged 65-69 and 70+, effectively subsidising premiums for a cohort

with the highest claims intensity at a greater rate than other policyholders. Removal

of differentiation by age will likely reduce participation in segments of the elderly

where they cannot afford the extra tax. The Government also flagged it will provide

$3.2 million over two years from 2025-26 for consultation on “further reforms to

improve the private healthcare system”, signalling ongoing policy risk.

• Reinforcing public system investment further pressures the PHI value

proposition. The Budget commits $220.3 billion over five years to the states and

territories for public hospital services under the 2026-2031 Addendum to the

National Health Reform Agreement (NHRA), including $24.4 billion in additional

NHRA funding over five years from 2026-27 (inclusive of the 2025-26 uplift in the

2026-2031 funding base). This represents incremental Commonwealth investment

above and beyond the higher funding cap already agreed. Separately, $1.8 billion

over five years (and $580.2 million p.a. ongoing) permanently funds Medicare