Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026
Mr MONCRIEFF (Hughes) (17:40): Neglect—the title of the 2019 interim report of the Royal Commission into Aged Care Quality and Safety in Australia is succinct and sobering. It reflects the state of the aged-care sector as it was under the Morrison government. The royal commission laid bare a system that had become unkind and uncaring.
It failed to meet the needs of elderly people, often neglecting them entirely. Royal commissioners Richard Tracey and Lynelle Briggs said the aged-care industry was a 'sad and shocking system that diminishes Australia as a nation' and that it needed to be changed. Under the Morrison government, home-care waitlists blew out by tens of thousands of places, forcing vulnerable seniors to wait years for basic support.
Facilities faced widespread staffing shortages and a lack of oversight left providers struggling to maintain basic standards of dignity. When we came to government in 2022, the aged-care system had been run into the ground and was failing to deliver adequate care to older Australians. Change to aged care is exactly what the Albanese Labor government has been implementing since it came to office.
It's why the 2026-27 budget of the Albanese Labor government is investing more than $3 billion in delivering more aged-care beds, more packages and better care for older Australians. The Albanese Labor government has listened to older Australians, their families, advocates and providers, and that's why we're investing $3.7 billion to deliver more beds, more packages and better care for older Australians to ensure that they get the support they need.
This means that 5,000 additional aged-care beds are available each year, principally for those with limited financial means, incentivised through building subsidies and an increase and restructure of the accommodation supplement. It means faster access to Support at Home places, increasing supports, improving assessments and bringing down wait times—improvements that are desperately needed.
It means personal care services, including showering, dressing and continence support, will be free alongside clinical care. It means expanding the end-of-life pathway to provide more care for palliative patients. It means 20 additional Specialist Dementia Care Program units and an expansion of the Hospital to Aged Care Dementia Support Program.
Our government is incentivising the construction of beds for aged-care residents and giving providers the certainty they need to build and maintain quality residential accommodation, making Support at Home fairer and more affordable for older Australians and continuing our work to set the system up for generations to come. It's work that is so important to ensure that older Australians have the dignity that they deserve.
These initiatives complement our government's efforts to date. Since Support at Home began on 1 November last year, estimated wait times for an ongoing place have fallen across all priority categories by several months. In the face of enormous demand, our government has released 32,000 new Support at Home places this financial on top of the 83,000 additional places released last financial year.
Almost three times as many older Australians will have access to a Support at Home place compared to those with a home-care package in 2020. To fund these substantial investments, our government has had to make principled decisions about where scarce funds are best allocated to improve the lives and wellbeing of older Australians. One of those decisions was to remove a Howard-era distortion in the private health insurance market, which has meant that some Australians have been priced out of the market, not because of their health, their income, their needs or their lifestyle, but simply because of their numerical age.
For a person aged 64 and living in Bangor in my electorate, this distortion has made private health insurance more expensive than it would be for their neighbour who is 65 even if the 65-year-old is less healthy, as they are likely to be. Why should two Australians with similar health needs, risk profiles and means be given different levels of private health support based simply on their age?
Why should a person aged 64 miss out on the generous subsidy afforded to their neighbour on the basis of their age? The policy violates the principle that we should be consistent in how we treat people with similar needs and of similar means. It is a horizontal inequity for a person aged 65 to receive a cross-subsidy from their 64-year-old neighbour with the same health needs and income.
It is fairer to provide different levels of support to individuals on the basis of their needs or ability to pay than to do so based on age. This policy has meant that younger, healthier people are being priced out of the private health insurance market, and increasingly it has meant that they are deciding that it's just not worth it. This is bad for the person who decides not to get covered, but it's also bad for everyone else in the market.
Insurance is about risk pooling. We need younger, healthier people in the market to ensure that insurance remains viable. Otherwise, insurance will continue to become riskier for providers, driving up prices and driving even more people away from coverage.
It's why the government is returning the private health insurance rebate for older Australians to the same level paid for everyone else. The changes proposed under this bill would ensure that Australians receive the same private health support based on their income, not their age. It's not a politically easy decision, but it is a principled and right decision.
The easy way would have been to leave this distortion in place and hope that the market would sort it out, but the reality is that the market was not sorting itself out with this distortion, and we were left with a policy that was neither equitable nor efficient. This government is investing in Australians health thanks to our record investment in Medicare, there are now 23 bulk-billing clinics in my electorate of Hughes.
We've also made Medicare urgent care clinics, like those in Campbelltown and Liverpool, a permanent part of Medicare. The opposition needs to decide whether they support this government's policy to deliver the 5,000 more aged-care beds, more support at home places for those with limited means, faster assessments and shorter wait times, more personal and clinical care services and more care for palliative and dementia care patients that this policy is funding.
If they don't, they should come in here and explain to the Australian people why they don't think that those people deserve care. For those opposite, the debate is not over the merits, the rationality or costs of the current settings; it's all about the politics, all about the three-word slogans, all about the anger they can marshal within themselves to present themselves as an ally of older Australians that they never were in government.
In contrast, the Albanese Labor government is investing in the much-needed aged-care supports that make a real difference to older Australians and their families. And we're doing it in a way that is direct, that is fair, and that gives real funding to where it will make the biggest impact—not through favouring some Australians over others on the basis of their age rather than their needs or their means, not through inefficient subsidies that distort the private market and put structural pressure on premiums, not through politically motivated attempts to shirk the hard business of real reform in pursuit of a headline.
It is the responsibility of those opposite, who trade so extensively in anger and grievance policies, to articulate the reasons why someone aged 65 should receive a higher rebate than their 64-year-old neighbour with the same income and health needs. The consequences of relentless negativity and irrational opposition are that older Australians are realising the coalition offers them no real support in government and has no plan to support them in the future.
The Albanese government is building on the changes we delivered in the previous term to incentivise construction of beds for aged-care residents and giving providers the certainty they need to build and maintain quality residential accommodation, making Support at Home fairer and more affordable for older Australians and continuing the work to set up the system for generations to come.
It's work that's so important to ensuring that older Australians have the dignity that they deserve. People aged 65 and over will still receive significant government subsidised discounts of up to 24 per cent on the premiums that private health insurance charge them, the same as the rest of the population. A single person earning $101,000 or less a year already receives a 24 per cent rebate on their private health insurance premium.
Our government is continuing this support. The reality is that this revenue could be spent on giving older Australians the aged-care support they need and building new homes to meet rising demand. Returning to income based rebates restores fairness in the rebate system and frees up funding to provide more dignity and care to older Australians.
Those opposite have been scaremongering about this change, like the sky will fall in. It won't. Even taking this change into account, the overall number of people with private health insurance is expected to continue to increase, including people aged over 65, as it has consistently over the last five years.
Independent research from the University of Melbourne has confirmed that the impact will be minimal, estimating that between 15,000 and 43,000 could drop their cover, with researchers saying this reform won't cause a mass exodus from private health insurance and definitely won't overwhelm public hospitals, as some states predict. We expect the impact of these changes will be less than a dollar a day over a year from when they're planned to take effect, from 1 April 2027.
Over the last four years, we have committed ourselves to restoring trust in the aged-care sector and restoring trust in our healthcare sector. It's why we've invested so much in bulk-billing, and it's why bulk-billing is slowly becoming the norm again across Australia. It's why we've got 23 bulk-billing clinics in Hughes.
It's why we are restoring the trust of Australians in the aged-care sector. But these decisions don't come without consequence, and we are taking the tough political decisions to make the necessary reforms to make our system sustainable. We're restoring fairness to the rebate system and directing much-needed funding to provide more dignity and care to older Australians and responding to the neglect that was identified by the royal commissions.
It is for this reason that I commend this bill to the House.