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

Mr PIKE (Bowman) (18:50): I congratulate the member for Forrest for such an articulate defence of our position. I'm assuming it is the case for every MP on both sides of this House—it's certainly the case for me—that this has really been the No. 1 issue that's been brought to my attention since the budget was dropped and since the Minister for Health and Ageing announced this in the lead-up to the budget.

Wherever I go—whether it's a doorknocking expedition, whether it's a coffee catch-up that I host in any corner of my electorate, whether it's emails I'm receiving or phone calls into the office—by every measure, the No. 1 issue that people are raising with me is concern about the government's cuts to the private health insurance rebate. Building off the contribution of the member for Forrest, I make the point that the people who are reaching out to me are not the one per cent.

These aren't the people who will be able to just swallow an increase in their insurance premiums without too much of a hassle. For these individuals, this isn't a luxury; this is something they've paid into for decades. They've sacrificed.

They've made real sacrifices in their budget for, in some instances, decades to try to ensure, firstly, that they are not a burden on the public health system and, secondly, that they're able to get that level of care that they need. Now Labor wants them to pay more. I'll share a story.

I hope I don't steal his thunder! The member for Fisher was speaking to a constituent of his. To illustrate the point that these people aren't the richest citizens within our community, he was speaking to a homeless man within his electorate and trying to support him, and the homeless gentleman asked him what was making news in his world and what the big issues were that people were talking to him about.

And he said: 'Private health insurance rebate cuts is the No. 1 issue. It may not affect you.' The member for Fisher started to articulate the position and where we're at with the policy debate. And the homeless man said to him, 'No, I've got private health insurance.' This is a man who doesn't have a home, but he knows the importance that it has for his health.

He has sacrificed everything that he has and—I'm sure—made many tough decisions in his financial journey but has kept the private health insurance up to date. Now we're going to have so many thousands of Australians potentially—we saw the figures, and I'll go to those shortly—who are going to be now facing, in a cost-of-living crisis, even more pressure on them to maintain that cover.

Of course, that places more pressure on our public health system at a time when our public health system in many states, including mine in Queensland, is under significant pressure. There's no wonder at all why the state governments are coming out almost as one voice and criticising this change in policy and outlining the impact that it's going to have on their capacity to deliver a robust and needs based public health system.

In the Redlands, in my electorate, there are 23,169 people over the age of 65 with private health insurance. They account for more than 23,000 hospital admissions every year. Every one of those people who keeps their private health cover helps ease pressure on our already stretched health system.

I'll point out Redland Hospital in my electorate: it's got ambulance ramping issues. At one stage, in the course of the last state government, it had the worst ambulance ramping statistics across the state. They do not need 23,000 additional hospital admissions every year.

They don't even need a tiny fraction of that. They've got their hands full just dealing with the existing caseload. These cuts come after another round of premium increases and during a cost-of-living crisis that is already stretching the household budgets of those 23,169 Redlanders absolutely to the max.

What concerns me most is the message that it sends, and the member for Forrest touched on this. Thousands of Redlanders in my electorate have done the right thing by maintaining their private health insurance and helping to take pressure off public hospitals, and now they're being penalised for it. I want to read out some of the emails that I've received.

These were just the first three that were in my little folder. Stephen from Birkdale wrote to me. He spoke about this policy and this bill.

He said: This is certainly a great concern for all of us aged over 65. We have paid significant amounts for health insurance over many years to cover ourselves and our children's' health during what have generally been our healthiest years. Now, when our health is most at risk and our pension incomes are lower, we are asked to pay more.

The principle of insurance is to smooth out costs, something that our Labor government doesn't seem to understand. As a self funded retiree who worked for over fifty years, raised five children, all of whom are tax payers, with thirteen grandchildren, six of whom are now working and paying taxes, I take umbrage at policies that target Australians who have built our nation to fund those who have not.

The world is a changing place but it is hard to accept— it goes on a tangent here, on an economic argument, but I think it's a strong one, so I'm going to go there— that aggregate government expenditure as a percentage of GDP has increased from 11% in 1960 to almost 40% today. The message that Labor is sending to young Australians is that they are better off not saving, not investing, and certainly not taking out health insurance, but rather relying on government handouts.

A very sad state of affairs indeed that does not augur well for the future. Paul from Alexandra Hills wrote to me and said: You can add me to the list of residents who are upset, to use a polite word. I am 74, soon to be 75.

My parents paid into private health insurance, and when I went into work I paid for myself. I'm now a pensioner … I still pay into private health insurance. The government has kicked me in the guts, with this insult to older Australians.

I could be insulting, which I won't, but this legislation must be reversed— or stopped from passing. He said: The outcome is that we all leave private insurance. It will send them broke.

And Kevin from Redland Bay wrote to me and said: I've been in a private health fund all of my working life and because of the latest changes bought in by this … government I'm now forced to give serious consideration to cancelling my cover. I've already cancelled my extras cover and I still can't afford the monthly cost. I'm 76 and I'm a pensioner so I can't afford to pay $250 a month for health insurance.

Nobody is talking about this anymore!!? … … … A lot of us are in this situation and just because it's not in the news cycle, it doesn't mean it goes away. You have to keep fighting this! Well, that's exactly what I'm going to do—for Kevin, for Paul and for all the Redlanders who've written to me and spoken to me on this issue.

Mr Thompson: Good luck. Mr PIKE: Thank you. This will leave many older Australians with a really difficult choice: to cut spending on other essentials, downgrade their cover or drop it altogether.

If people drop private health insurance, it puts, of course, more pressure on the public system. I want to touch on the modelling discrepancies that we've seen between the government's numbers and what we're hearing from industry and from other advocates. The government has been forced to admit that its cuts to the private health insurance rebate for older Australians will place financial pressure on about 1.2 million pensioners.

On its own admission, the department still does not have a reliable up-to-date count, despite the health minister announcing the $11 billion tax grab in April. The government argues that these cuts will save money, but the government's own independent actuarial modelling suggests the opposite. It found that, while the Commonwealth could save around $482 million, the resulting increase in demand on public hospitals would cost governments around $547 million.

In other words, we've got a situation here where taxpayers are going to end up paying more while patients are waiting longer. It's an absolute lose-lose. This is the worst of both worlds.

We found out today from the Parliamentary Budget Office that $1.6 million of $3 million will be ripped from the pockets of pensioners. It's an outsized impact on those who are the most vulnerable in our community. The country's biggest private health insurer has also disputed the government's own modelling.

The government projects around 44,000 people will drop their cover, which isn't an insignificant number. That's half a Tasmanian electorate or maybe even more. This is a significant number of Australians who, just by the government's what I think is underdone modelling, will be impacted.

But Medibank points to external modelling suggesting that the figure could be more than double that, up to 91,000. There were slightly more than 91,000 watching the NFL game at the MCG, but it wasn't much more. Imagine that number of Australians pouring into the public health system.

What sort of impact would that have? I'll tell you what. It would completely flood the Redland Hospital, and I don't think the Townsville hospital would be very far behind, the member for Herbert!

We're hearing many other expert views on this as well. Medibank, HCF and Bupa have jointly warned that the change will fall hardest on poorer retirees and older Australians, particularly in our regional areas, and that a shrinking pool will push premiums higher for everyone else who remains. That point was made very articulately by some earlier speakers.

More people dropping out of these insurance pools means extra pressure on everyone else, and, of course, that creates then a race to the bottom where people start withdrawing as it becomes more expensive, and we'll find ourselves with even greater expenses and even more pressure on the public system. The Australian Medical Association says that it's unconvinced that the measure will deliver genuine net savings once the flow-on pressure to public hospitals is counted.

I think that's an important point. I often make this point to stakeholders who meet with me on my mental health and disability portfolio: too often I think that the decisions made by Treasury, and potentially the Parliamentary Budget Office too, are based on the immediate impact that they're going to have on the federal government's bottom line. But what about the overall impact on taxpayers once this has been pushed onto the states, not to mention the ongoing costs that happen when you don't get that opportunity to get preventative investment?

National Seniors Australia has found that as many as 45 per cent of people whose sole source of income is the age pension hold private health insurance. National Seniors also warned that some older Australians could end up paying more than $1,000 extra each year to keep the level of cover that they already have. Now, I'm sure that what we're going to see is a lot of people who are able to scrape it together and just hold on to their cover.

But, of course, what they're going to do is scale down that cover. They're going to move from higher levels down to lower levels and they're going to gamble that or make the judgement that that will cover them. Well, these are the years of life where most people will find themselves meeting the health system far more than they actually want to, and, when you make those sorts of savings decisions, they can ultimately cost you a lot more—cost the taxpayers a lot more—in the long run.

It's simply unfair for Labor to punish older Australians by reducing the private health insurance rebate. It's simply unfair. It doesn't make economic sense.

It doesn't make sense from a health perspective. It might make sense to the Treasurer, but I don't think it makes much sense to the 23,000 Redlanders who are going to be affected. It certainly doesn't make sense to the health professionals within my electorate as well, who are concerned about it.

When people ask me about the government's rationale, I try to explain how they're justifying this. But ultimately I struggle because I think it is a very cynical move. It's a political calculation.

That's what this is—the political calculation of 'we can take a little bit of the benefit that these Australians receive and we can take it away from them with a minimal political cost'. According to their political judgement, it means that they're not going to lose too many votes out of that cohort. Well, I can tell you that I think they are going to lose a lot of votes out of this.

I think this is a classic misjudgement—a bit like 2019, perhaps, with some of those property tax changes. But I won't go there; I want to stay relevant. I see this as a very cynical political exercise.

It doesn't make sense from a health perspective. It doesn't make sense from an economic perspective. It is purely a budget-saving measure that is very short term in its thinking.

I could go on. I've got a number of press statements here from various groups who are opposed to these changes. Private Healthcare Australia outlined that three million older Australians could face much higher health insurance costs under this proposal.

It could cause up to 62,000 to drop their cover and another 200,000 to downgrade. Two federal electorates downgrading their cover—imagine the impact that's going to have on the public system. I could run you through Bupa's submission, which is chock-full of goodies just like that.

They've made the point that it disproportionately impacts older Australians on low and fixed incomes. That's an important point. The coalition supports choice.

The coalition believes that, if people work hard to pay for private health insurance their entire working life, this should be encouraged and not punished. That's why we are going to fight to stop Labor's cuts to the private health insurance rebate. We are going to fight this every step of the way.

The government should scrap this proposed cut. They need to scrap it and stop treating older Australians who've done the right thing for decades as its next revenue source.