Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026
Mr LLEW O'BRIEN (Wide Bay) (10:03): The Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026 abolishes the age based private health insurance rebate loading available to Australians 65 years and over and also represents another attack on older Australians at the worst time in their life, at the worst time that they can afford it.
The government claims this change will simplify the rebate and make it fairer, more targeted and financially sustainable. According to the minister, the current system is not equitable because older Australians receive a larger rebate than younger Australians on the same income. Labor argues that removing the age based rebate will free up billions of dollars that can be redirected to other health, disability and age-care priorities.
But what it really means is that the Albanese Labor government is proposing to cut the incentive that's specifically designed to encourage older Australians to maintain their private health insurance at a time when they need private health insurance the most and after a lifetime of hard work, paying taxes, raising families and helping build this nation. The government is sacrificing the private health insurance of older Australians in the name of what Labor calls 'intergenerational equity'.
All Australians, young and old, have every reason to be sceptical and critical of this counterproductive move. This is the same government whose version of intergenerational equity involves giving universities an extra $16 billion to reduce student debt while expecting senior Australians to pay around $50 an hour for assistance with showering, dressing and personal care.
This is the same government that has presided over an aged-care system where more than 3,000 older Australians remain stuck in hospital beds because there is nowhere else for them to go. So, when Labor says the savings from the bill will somehow improve services for older Australians, many seniors rightly wonder: where is the evidence? The government's justification rests on the assumption that older Australians will continue to hold private health insurance even after the rebate cut.
Labor argues that the higher rebate has little influence on participation rates and that most seniors will simply absorb the additional cost. This is a deeply flawed assumption. The age based rebate loading was introduced by the Howard government in 2005 for a reason.
It recognised a simple reality—older Australians are more likely to require hospital treatment and healthcare services than younger Australians. The purpose of the additional rebate was to make private health insurance more affordable at the stage of life when people are most likely to need it. It helped retirees and pensioners maintain cover and reduced pressure on an already stretched public health system.
This bill turns its back on that principle. More than three million Australians are expected to be worse off under the changes, including 1.2 million pensioners living on fixed incomes. The government's own modelling anticipates that around 44,000 older Australians will drop their private health insurance as a result of this move, but many believe that figure significantly understates the real impact.
The insurance sector estimates that around 62,000 seniors will reduce or abandon their cover, and National Seniors Australia has warned that up to 400,000 older Australians could downgrade their cover, with around 270,000 potentially giving up private health insurance altogether. If even a fraction of these forecasts prove accurate, the consequences to Australia's public health system will be substantial.
Every senior who leaves private health insurance becomes more reliant on public hospitals. That means longer waiting lists for everyone who relies on the public system, young and old, and it means greater costs for state and territory governments already struggling to manage growing healthcare demands. The irony is that, while the bill claims to deliver savings to the Commonwealth, it shifts costs elsewhere and leads to worse health outcomes.
State and territory governments will be left to deal with the consequences. This is why concerns about this policy extend beyond the coalition. The South Australian Labor government has voiced opposition to the measure.
The New South Wales, Queensland and Tasmanian governments have also raised concern about the impact these changes have on their health systems. These governments understand what the minister refuses to acknowledge—that reducing incentives for seniors to maintain private health cover risks pushing more patients into public hospitals and increasing costs for taxpayers in the long term.
Perhaps the most alarming aspect of this legislation is that the government appears to have proceeded without fully understanding the consequences, which seems to be something this government does a lot. During Senate estimates, health department officials acknowledged that they had not modelled the impact this bill would have on demand for public hospital services.
Think about that. The government that is proposing to remove billions of dollars in support from older Australians and admits that thousands of people are likely to leave private health insurance has not bothered to model the impact on public hospitals. That is not evidence based policymaking.
That is budgeting first and asking questions later. As is so often the case, regional Australia stands to bear the greatest burden. Regional hospitals are already under immense pressure.
They face workforce shortages, specialist shortages and growing waiting lists for elective surgeries. Communities across regional Australia simply do not have the capacity to absorb a significant increase in patients moving from the private system to the public system. In the electorate of Wide Bay, these concerns are not theoretical.
Pensioners are worried, and they've been contacting my office en masse. Many have told me how they are already struggling with Labor's cost-of-living crisis and they do not know how they will afford rising premiums once their rebate is reduced. Others say they will have no choice but to downgrade the level of cover they have carefully maintained for years.
These are not wealthy Australians seeking special treatment; they are retirees who have done the right thing. They have paid for private health insurance throughout their working lives because government encouraged them to do so. Now, just when they are most likely to need procedures such as cataract surgeries, hip replacements or knee replacements, Labor's asking them to pay more and receive less.
For many, the alternative will be joining already lengthy public waiting lists. This bill uses smoke and mirrors to improve the Commonwealth's bottom line, but it does so at the expense of older Australians and at the risk of placing ever-greater pressure on our public health system. This is why I cannot support this legislation, and I urge the House to reject it.