NZ First wants people over 65 to be given a 25 percent rebate on their health insurance premiums.
MP Andrew Williams had drafted a member's bill which would introduce it.
He says there's been a dramatic fall in the number of people who have health insurance, particularly senior citizens.
"Those over 65 often stop their insurance when their income drops and their premiums escalate, so a 25 percent rebate would encourage them to keep their health cover," he says.
"If the Government doesn't stimulate higher voluntary levels of health cover, the consequence will be greater rationing of public health care as we deal with an ageing population."
The health insurance industry is welcoming Mr Williams' bill.
Roger Styles, chief executive of the Health Funds Association, says a rebate would help sustain the health system in the face of increasing costs, overstretched resources and an ageing population.
Mr Williams' bill has to be drawn from the members ballot before it is debated in Parliament.
There are 68 bills in the ballot and one or two are usually drawn every second Wednesday Parliament sits.