Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026

Ms ROBERTS (Pearce) (12:37): The incorporated speech read as follows— I would like to speak in support of the Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026. This is a practical and responsible reform. It modernises the private health insurance rebate, improves fairness in how government support is delivered and ensures taxpayer funding is directed where it can make the greatest difference.

At its core, this bill reflects a simple Labor principle: government policy should be fair, sustainable and fit for the times in which we live. As Australia changes—through an ageing population, rising health costs and growing pressure on household budgets—our policies must evolve to remain effective and equitable. This bill does exactly that.

The Australian government currently invests around $8 billion each year in the private health insurance rebate. It is a significant investment that supports Australians to take out and maintain private cover, promotes consumer choice and complements our public health system by easing pressure on hospitals. Labor recognises the important role private health insurance plays within Australia's mixed health system.

A strong Medicare, well-funded public hospitals and a sustainable private sector are not competing priorities. They are complementary parts of a system that supports Australians at every stage of life. But, when governments invest billions of taxpayer dollars, we have a responsibility to ensure that funding is fair, effective and aligned with contemporary needs.

That is the question this legislation addresses. The higher rebate for Australians aged 65 and over was introduced by the Howard government more than two decades ago, in very different economic and fiscal circumstances. Today, it is increasingly difficult to justify.

Under current arrangements, two households with the same income and the same level of cover can receive different levels of government support solely based on age. That distinction no longer reflects a fair or consistent approach. The rebate was originally designed to encourage people to take out and retain private health insurance.

However, older Australians are already far more likely to maintain their cover than younger Australians. At the same time, Australia's community rating system ensures that everyone pays the same premium for the same policy regardless of age or health status. This means younger Australians already help subsidise the higher health costs of older policyholders.

Over time, older Australians also receive significantly higher benefits from their cover. In that context, providing an additional age based rebate on top of these arrangements no longer aligns with the original purpose of the policy. This bill restores a simple principle: Australians on the same income should receive the same level of government support, regardless of age.

Importantly, the rebate itself is not being abolished. It will remain in place and continue to be means tested. Australians on lower incomes will continue to receive higher levels of support, because Labor believes assistance should be based on need not arbitrary distinctions.

These changes will commence on 1 April 2027, providing time for households, insurers, and the sector to adjust. I acknowledge that this reform will not be welcomed by everyone. Around 3.2 million Australians aged 65 and over will be affected.

For many, the average increase in premiums is expected to be around $250 per year—less than one dollar a day—although some may pay more, depending on their policy. No government takes decisions like this lightly, but responsible government requires us to ensure that limited public resources are used where they will have the greatest impact, particularly at a time of growing demand for health care, aged care and disability services.

This reform is also about intergenerational fairness. Younger Australians today face significant financial pressures—housing affordability, cost of living and economic uncertainty. Older Australians deserve security and dignity in retirement.

Good policy must balance these needs without privileging one group where circumstances no longer justify it. By removing an age based distinction while retaining income testing, this bill strikes that balance. For my electorate of Pearce, these issues are not abstract.

My community is one of the largest and fastest-growing in Western Australia. We have young families establishing themselves in Yanchep, Alkimos, Butler and Eglinton, alongside retirees who have chosen our coastal suburbs as their home. Across Pearce, people are managing mortgages, rent, groceries, childcare, fuel and insurance costs.

They expect government to spend public money wisely and fairly. This legislation meets that expectation. One of its strongest features is not only that it improves fairness but that it allows government to invest where the need is greatest.

The savings from this reform—around $3 billion—will be reinvested into strengthening Australia's aged-care system. This includes delivering more residential aged-care beds, expanding Support at Home packages, reducing waiting times and improving the quality of care. That is a clear choice about priorities.

As Australians live longer, demand for aged care continues to grow. Families expect that, when their loved ones need support, it will be available, timely and of high quality. This government has already taken significant steps to rebuild aged care—improving standards, strengthening accountability and supporting the workforce.

This legislation builds on that work by providing additional investment to expand capacity and improve services. It is also an investment in the broader health system. When older Australians cannot access appropriate aged care, the effects are felt across hospitals through delayed discharges, increased pressure on emergency departments and longer waiting times.

Expanding aged-care capacity helps address those pressures, ensuring people receive care in the right setting, and hospitals can focus on acute care. That is sensible policy and responsible budget management. The government has also carefully considered the impact of this reform on private health insurance participation.

The evidence indicates the effect will be modest. By 2028-29, there may be around 44,000 fewer insured Australians aged 65 and over than otherwise projected—around 0.4 per cent. Participation overall is still expected to grow.

Importantly, the impact on hospital admissions is expected to be minimal. This demonstrates that we can improve fairness and redirect investment without undermining the broader health system. Australians will continue to receive the private health insurance rebate.

Lower income households will continue to receive greater support. Community rating will continue to ensure fairness in premiums, and the rebate will continue to be indexed. This bill also removes a now redundant exemption in the Age Discrimination Act, reflecting the move to an age-neutral rebate and simplifying the legislation.

For communities like Pearce, this reform has real significance. People want a health system they can rely on. They want Medicare to remain strong.

They want access to hospitals and primary care. They want quality aged care for their families, and they want confidence that their taxes are being spent responsibly. This legislation helps deliver that.

It forms part of the Albanese Labor government's broader agenda to strengthen Australia's health system—rebuilding Medicare, investing in bulk-billing, supporting hospitals, improving access to medicines and delivering once-in-a-generation aged-care reform. It also reflects something fundamental about good government. Good government is not about maintaining policies simply because they have existed for many years.

It is about asking whether those policies still serve their purpose, whether they are fair and whether they deliver the greatest benefit to the community. In this case, the answer is clear. The age based rebate may once have been appropriate, but circumstances have changed.

Our demographics have changed. The pressures on our health system and budget have changed. Public policy must evolve accordingly.

This bill modernises the rebate, ensures fairness across income groups and redirects resources to where they are most needed—supporting older Australians through better aged care. That is not withdrawing support. It is delivering it in a more effective way.

There will always be differing views about how public funding should be allocated, but most Australians would agree on some core principles. Australians on the same income should be treated equally. Public funding should be directed where it has the greatest impact.

Older Australians should have access to high-quality aged care, and governments should have the courage to modernise outdated policies. This legislation reflects each of those principles. For the people of Pearce—for young families, retirees, workers and small businesses—these principles matter every day.

They want fairness, they want a strong health system, and they want responsible decisions from government. That is what this bill delivers. It modernises an outdated policy.

It improves intergenerational equity, it maintains support for private health insurance through a fair, means tested rebate, and it strengthens aged care through a $3 billion reinvestment. It demonstrates that responsible economic management and compassionate policy go hand in hand. For the people of Pearce, for older Australians who deserve better care and for the long-term sustainability of our health system, I commend the bill to the House.