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

Mr BIRRELL (Nicholls) (17:52): It's fascinating to watch the Labor members come in here and try to defend this, and I will give my complete plaudits to the creativity of the talking-point authors, because what they've managed to weave into a defence of what is quite clearly a cost shift, a cut and an attack on older Australians is quite breathtaking. I rise to oppose the Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026, like people on this side of the House, for many reasons.

Its consequences will not be shared evenly across Australia. This bill is not a saving for regional Australia. It's going to be a cost shift from Canberra onto older Australians, regional hospitals and state health systems and families.

In metropolitan Australia, patients may have many alternatives. But in regional communities, like the one I represent, when capacity is lost, there may be no replacement hospital specialist or maternity service nearby. The coalition opposes this bill and calls on the government to abandon it.

For regional communities, this affects whether an older Australian can keep their private cover and whether a regional hospital can retain a viable service and whether an already stretched public hospital absorbs still more demand. People in regional Australia are already forced to travel longer, have access to fewer specialists, have a thinner workforce and have less choice.

A policy that makes private cover less affordable compounds every one of these disadvantages, and the government is using amazing language to try and defend this—'modernisation', 'distortion'—and trying to bring the age gap into it, somehow saying 'the huge divide between 64- and 65-year-old people'. We make age based decisions on many things, and that never gets called into question.

This has been a way of acknowledging the service that older Australians have given to this country and making it a bit easier for them to access private health insurance when they turn 65. What does this bill do? From 1 April 2027, the bill removes the higher age based rebate for eligible people aged 65 and over.

For the base income tier, the current rebate is about 28 per cent for people aged 65 to 69 and about 32 per cent for people aged 70 and over. Both would fall to about 24 per cent. The government says the average additional cost for the affected person is about $250 a year.

That average hides the wide variation experienced by age, income, policy and premium. In fact, I remember—I think it was during question time today—that the member for Fisher talked aboutJanice and her husband from his electorate, people who've worked very hard, paid their taxes and done the right thing. It's going to affect them to the tune of $800 per annum.

That's $800 for a retiring family. After this change, the rebate will be determined by income alone, and the government argues that households on the same income should receive the same subsidy, regardless of age, and says the savings will be redirected to aged care. But genuine fairness must account for fixed retirement incomes, high use of hospital care, decades of continuous premiums and the unequal availability of services outside of capital cities.

It's a point worth making, for those of us who represent regional areas, that the regional impact is different, like in so many things. Regional health systems operate with less redundancy. A metropolitan patient may have several hospitals within reach.

A regional patient may have one local option or, if that's not available, it's a long trip to Bendigo, Melbourne or another major centre. Regional public hospitals are already managing workforce shortages, constrained theatre capacity, specialist gaps and long elective surgery queues. Private hospitals aren't a luxury add-on.

They are part of a region's total health capacity: theatres, beds, nurses, visiting specialists, rehabilitation and maternity services. If older policyholders cancel or downgrade cover, demand does not disappear, it moves into the public system or care just gets delayed. Regional communities also understand that distance itself is a health cost: fuel, accommodation, time away from work and family and the difficulty of returning for follow-up care.

Regional equality is not achieved by applying the same rules everywhere. It is achieved by recognising that the same policy has a harsher effect where alternatives are scarce. Catholic Health Australia warns that more than 200,000 older Australians could drop or downgrade hospital cover and that some regional private hospitals could become unviable.

Now, their case study is St Vincent's Private Hospital in Lismore. It's the only inpatient private hospital serving a large regional catchment, and it reports that 73 per cent of admissions and 79 per cent of bed days involve patients who are over the age of 65 years. Its modelling suggests that 1,200 to 1,800 patients a year could no longer be treated there, with an annual revenue loss of $2.6 million to $3.9 million.

That example is Lismore, but it matters so much beyond there. It shows how a national rebate decision can concentrate its damage in an older regional population and weaken an entire local healthcare service. Once a regional theatre, ward or maternity unit closes, it is extraordinarily difficult to rebuild.

We lose staff, the specialists take work elsewhere, and the community's confidence in the healthcare service of the region—and, by extension, the region itself—falls. When a country community loses health capacity, patients remain but their care becomes further away, later and more expensive. The government's modelling estimates that 44,313 people will drop cover entirely.

The government characterises the overall membership impact as—and I quote, because I've heard it from many of those opposite—'marginal'. Obviously, the talking point author loved the word 'marginal' and loved the word 'distortion'. Stakeholder estimates are higher and include an additional risk that many people will downgrade rather than leave altogether.

Downgrading matters because lower-tier policies may no longer cover procedures such as hip replacements or cataract surgery. Catholic Health Australia estimates the policy could shift about $675 million per year in additional costs to public hospitals. Whatever figure one prefers, the direction of the travel is clear: when privately insured activity falls, pressure increases elsewhere.

The regional effects are practical: longer elective surgery queues, more delayed treatment, greater reliance on patient transport and more people travelling to larger centres. And state governments that operate public hospitals have raised concerns about whether they can absorb this demand. Many older Australians keep private insurance by making sacrifices elsewhere.

We know that. Regional retirees often face added transport and access costs before the treatment even begins. Timely cataract surgery, joint replacement and rehabilitation can be the difference between remaining mobile at home or needing to enter higher level care.

Again, Catholic Health Australia estimates that the delayed access associated with this change could result in more than 800 additional people entering residential aged care each year. This is a warning about a system interaction. Weakening access to timely hospital care can increase aged-care demand rather than reduce it.

The government says that the savings from this—and there are savings, so they've got to admit that it's a cut—will fund aged care. But it needs to explain how many additional hospital episodes, delayed procedures and earlier aged-care admissions have been fully modelled, particularly by geography. We're getting some comments from some of the Labor members coming in to defend this, saying, 'Obviously, by opposing this cut, you don't want us to fund aged care.' It really is ridiculous to say that this is the only way we can have a proper aged-care system—which is, in my electorate and I suspect other people's electorates, going from bad to worse.

And the home-care patient system's not working. The minister needs to come in here and give some better answers, to be honest and frank, about when we're going to see an improvement in aged-care delivery, both in home-care packages and in aged-care facilities. He needs to explain how aged care is going to be correctly funded.

You can't just say that we're going to fund it by taking people's rights and their ability to get a subsidy on private health insurance away from them. But it's not only an issue for retirees. Stakeholders warn that if older Australians downgrade from gold cover then premiums may rise for younger families who remain in that pool, and they need gold cover for things like maternity service.

That risk is especially serious—again—in regional Australia, where private maternity services are already fragile and closure can force families to travel long distances to give birth or rely on an overstretched public system. So I believe that the policy test for the government has not been met. Before proceeding, the government should publish transparent modelling of cancellations and downgrades, not merely national participation.

It should quantify impacts on public hospital admissions, elective surgery waiting lists and state budgets. It should identify regional private hospitals and maternity units at risk and model the impacts by postcode, age profile and service catchment. It should explain the consequences for aged-care entry and home-care demand.

It should consult the states, private and not-for-profit hospitals, seniors, rural health organisations and regional communities before legislating. I sound like a broken record coming into this place, but it is the government of unintended consequences. Not enough thought, not enough modelling and not enough of the 'what if' question goes into the policymaking of this government and the decisions that it ends up putting into this parliament.

We've seen that with the budget. We've seen it with the Murray-Darling Basin Plan. We've seen it with so many.

We've seen it with the energy transition. Not enough modelling and thought goes into what might happen. Therefore, we get these terrible unintended consequences, and I fear this may be similar.

In conclusion, regional Australians do not ask for special treatment. They ask the government to understand the conditions in which services are actually being delivered, and this bill makes private insurance less affordable for older Australians at the stage of life when they are most likely to need hospital care. This change risks shifting patients into public hospitals that are already under significant pressure, weakening regional private services and therefore creating flow-on costs for aged care and younger families.

The coalition will oppose this bill, and it should be abandoned. It's poor policy to try and achieve budget savings by taking health choices from older Australians and hospital capacity from regional Australians.