Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026
Ms LANDRY (Capricornia—Chief Nationals Whip) (19:05): I rise to oppose the Albanese government's plan to abolish the age based uplift in the private health insurance rebate, a change that will impose an $11 billion cost on older Australians and place further pressure on our public hospitals. The government calls it budget repair and intergenerational fairness.
In Capricornia, it means a pensioner in Rockhampton, a retired couple on the Capricorn Coast or an older Australian in Sarina or Moranbah paying more for the cover they have maintained for decades. From April 2027, couples aged over 65 with gold cover could face up to $1,614 a year in additional costs, while individuals could pay up to $807 more. Combined with the expected annual premium increase, some older policyholders face a rise of more than 21 per cent, the largest increase in private health costs on record.
A higher rebate was not an accident; it recognises that older Australians, who are generally on fixed or modest retirement incomes, are more likely to require hospital care and are less able to absorb sudden premium increases. Helping them remain insured is fair to them and prudent for taxpayers. Holding private health insurance does not mean someone is wealthy.
National Seniors Australia found that as many as 45 per cent of Australians whose sole income is the aged pension maintain private cover. They make sacrifices elsewhere because access to health care provides security and peace of mind. Former Australian Medical Association president Dr Michael Gannon describes those affected as 'people who have put their health ahead of holidays and leisure pursuits'.
Labor's response is to make that responsible choice harder to sustain. Under the current arrangements, the base tier rebate is a little over 24 per cent for people over 65, just over 28 per cent for those aged 65 to 69, and just over 32 per cent for people aged 70 and over. The Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026 would flatten those rates so age no longer provides any additional assistance.
The government says the average additional cost will be $252 a year, but that figure conceals the households carrying the heaviest burden. Independent analysis indicates an average effective premium increase of around nine per cent, rising to around 12 per cent for some members. The burden is not evenly shared.
Around 70 per cent of affected Australians aged 65 and over have incomes of $55,000 or less, and more than 80 per cent are in the base-income tier. These are lower and middle income retirees with little room in tightly managed household budgets. For older Australians already dealing with higher grocery, electricity, insurance and rate bills, this leaves three choices: cut spending elsewhere, downgrade their cover or abandon it altogether.
None is a good outcome. One Rockhampton couple, both aged 87 and reliant on the full aged pension, told me that keeping the cover they have maintained for decades could cost about $800 more each year. If it becomes unaffordable, they will have little option but to rely on Queensland's public system.
This is the real impact hidden behind the phrase 'modernising the rebate': a retired couple deciding which essential expense must give way. The consequences are particularly serious in regional Australia. In Capricornia, private health insurance is not marginal—90,934 people, 53.5 per cent of the electorate's population, hold cover.
In the year to December 2025, private health insurance funded 30,291 hospital admissions for local residents and paid $119.5 million in hospital benefits. Almost 42 per cent of privately insured hospital patients from Capricornia were aged between 65 and 84, with a further four per cent aged 85 or over. The group targeted by this measure is therefore central to the private system's role in our region.
Those figures show what is at stake. Private cover helps fund treatment at the Mater Private Hospital Rockhampton and Hillcrest Rockhampton Private Hospital and other services used by Central Queensland patients. It supports timely access to procedures, including hip and knee replacements, cardiac interventions, lens and glaucoma procedures and neurological treatment.
Private health insurance also supports services beyond major surgery. It helps people access dental, optical, physiotherapy and other allied health care, while private hospitals provide more than half of the inpatient beds used for mental health illnesses and addictions nationally. When cover is downgraded, the effects can extend across a patient's care, not simply to one future operation.
For patients in Moranbah, Clermont, Sarina and smaller communities, specialist care can already mean long-distance travel, fuel and accommodation costs, time away from family and limited appointment options. Private cover provides greater certainty where geography already narrows choices. If an older Australian drops or downgrades their cover, the need for a cataract operation, joint replacement, scope or cardiac procedure does not disappear.
Gold-to-silver downgrades can remove cover for precisely those high-use treatments. The patient and the cost are simply transferred to the public system. Private hospitals perform roughly two-thirds of Australia's elective surgery.
Weakening participation among older Australians—the people most likely to need hospital care—risks longer public waiting lists, greater bed pressure and more ambulance ramping. That is why this measure is a false economy. Independent Finity modelling found that, for every one dollar the Commonwealth saves by reducing the rebate, public hospitals face about $1.20 in additional costs.
Earlier modelling put annual rebate savings at $482 million but extra public hospital costs at approximately $547 million. The consequences already extend to private hospital capacity, specialist services and regional jobs. If higher cover products become less viable as older members leave or downgrade, hospitals operating with small patient bases and tighter margins may offer fewer local services, forcing more patients to travel.
Rockhampton Hospital is the major referral hospital for Central Queensland. Any policy that shifts more patients into public care will be felt there and across the regional network through longer elective surgery queues, greater demand for specialists and added pressure on beds and staff. That concern crosses party lines.
Labor governments in New South Wales, Victoria and South Australia, together with coalition governments in Queensland and Tasmania, have raised objections because they operate the public hospitals that will inherit the costs. The government argues that people on the same income should receive the same rebate regardless of age and that the savings will be redirected into aged care.
No-one disputes the need to invest in aged care. The question is whether the investment should be funded by making health insurance less affordable for the very Australians most likely to need hospital treatment. That argument also ignores the purpose of age based assistance.
Community rating means people generally pay the same premium for the same policy regardless of age or health status, while younger members help cross-subsidise older members higher claims. The additional rebate complements that structure by recognising that older Australians are often on lower fixed incomes precisely when their need for hospital care rises. Insurers, including Medibank, HCF and Bupa, have warned that the change will fall hardest on poorer retirees and older Australians in regional areas.
The government's modelling says at least 44,000 people will drop their cover, while external and industry estimates suggest up to 91,000 may leave and up to 190,000 may downgrade from gold to silver. A National Seniors Australia survey of 2,042 older Australians found 8.4 per cent were considering dropping hospital cover and 12.5 per cent reducing it. Applied nationally, that could mean up to 270,000 people leaving and 40,000 downgrading—far beyond the government's estimates.
The government has also admitted that around 1.2 million pensioners could face additional financial pressure, yet it still lacks a reliable up-to-date count of those affected. Parliament should not be asked to endorse an $11 billion measure on incomplete homework. The Senate inquiry is due to report in October.
The responsible course is to allow that scrutiny to test the assumptions, to hear from consumers, hospitals, insurers and state governments, and to assess the regional consequences before this measure proceeds. A change of this size affecting millions of Australians and commencing on 1 April 2027 deserves more than assurances based on disputed estimates. The coalition believes Australians who have paid for private health insurance throughout their working lives should be encouraged to keep it.
Reform must be evidence based and designed to strengthen the entire health system, not improve one Commonwealth budget line by transferring costs to households and the states. Before parliament supports such a significant change, the government should release transparent modelling showing how many Australians will pay more, how many pensioners will be affected and how many people will downgrade or leave private health insurance, and what this will mean for elective surgery waiting lists, state budgets and regional health services.
Older Australians have spent their lives contributing to this country, building businesses, working on farms and in mines, teaching children, caring for patients, raising families and volunteering in their communities. The government should scrap this proposed cut and recognise what Central Queenslanders understand instinctively: shifting a patient from a private hospital to a public hospital does not make the illness disappear or the operation unnecessary.
It simply moves the demand and the cost into a regional system already working hard across enormous distances. Labor should abandon this cut before older Australians and our public hospitals are left paying the price.