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

Mr WILLCOX (Dawson) (10:12): Getting older costs more—more prescriptions, more specialist appointments, more scans, more procedures and very often more health care. Yet the government has said that, from 1 April next year, it will scrap the additional private health insurance rebate currently available to Australians aged 65 and over. Older Australians won't lose the rebate altogether, but they will lose the extra support they currently receive.

That raises a pretty basic question: why remove support at the very stage of life when people are more likely to need their health care? I've been speaking to people right across Dawson, and they're asking themselves this difficult question: can I still afford my cover? These aren't people looking for some exclusive healthcare experience.

They are retirees and pensioners who have paid for private health insurance because they want choice and certainty when they need treatment. For many of them, their income is not going up, but their insurance premiums are. Their electricity bills are.

Their groceries are. And now the government wants to take away part of the rebate that helps make their private health cover more affordable. For some on a fixed income, that can be the difference between keeping their cover and giving it up altogether.

That is where the policy stops being a budget measure and starts becoming a health system problem because people who leave private health insurance don't stop needing health care. They still need a specialist. They still need the procedure.

They still need the hospital. The question is whether they continue to access the private system or whether they end up adding to the pressure on the public hospitals. In regional Australia, that pressure matters.

We know public hospitals don't have unlimited capacity. If more older Australians are rushed out of private health insurance, it will have a flow-on effect. It will mean more demand for beds and longer waits for people already relying on the public system.

This includes younger Australians living with chronic conditions—people who are already on long waiting lists for treatment or specialist care. That is why I've been listening carefully to the people who are most affected. Recently I met with Warren and seven fellow members of NQ Retirees in Townsville.

They said they didn't want luxury. They're not asking for any special treatment. They're just telling me that, after years of paying for private health insurance, they're worried that they may soon have to choose between their health cover and other basic household expenses.

And this is simply not good enough. They are also generally concerned, if more people choose to give up their private health, about what that means to the public health system, what that means for people who cannot afford private health care and what it means to the state economy when more expensive procedures are pushed into the public system. And that is a choice I don't think the government should be forcing on older Australians.

The government says the change will affect about 3.2 million Australians aged 65 and over and save around $3 billion over four years. For the Treasurer, that is a line in the budget. But for an older Australian on a fixed income, it is a line too far in his or her household budget.

This Labor government spent months resisting calls to release the modelling behind this policy, and now we know why. Labor says this change will save $3 billion over four years, but the Parliamentary Budget Office modelling shows that almost $1.6 billion of those savings will come from age pensioners who hold private health insurance. That is half the savings.

It puts a very different face on the government's decision to standardise the rebate, because behind that word and behind the modelling are pensioners who are already going to be paying more to maintain health cover they already have. You can call it standardisation, but for the person receiving the bill it is a higher cost, and when you follow the money you find poor pensioners.

And this is a shame. Let's not forget the self-funded retirees, who receive little or no government assistance, who will save throughout their working lives and who pay their own way through retirement. They don't fit into a pensioner statistic, but they will still feel the impact.

They face the same question: do I keep my cover or cut it and use that money for something else? The government's own modelling suggests around 44,000 people could leave private health insurance as a result. But that isn't the whole story.

Some people won't cancel their policy completely. They will downgrade it. They will accept the higher excesses, reduce their level of cover or drop benefits that they can no longer afford.

The question shouldn't be simply how many people cancel. What everybody should be asking is: how many Australians will have less health cover than they have today? Private Healthcare Australia has warned tens of thousands could drop their cover, with many more downgrading.

Medibank has pointed to external modelling suggesting that the number who leave could be as high as 91,000. And National Seniors have also found significant numbers of older Australians considering dropping or downgrading their hospital cover. These figures tell us there is real uncertainty.

Private health insurance is not some foreign system that sits outside Medicare. It is part of Australia's health system. It takes pressure off the public hospitals.

It gives patients another pathway treatment, and it gives Australians another choice about how and where they will receive their health care. If those opposite truly cared about Medicare, they would take off their rose tinted glasses for long enough to understand the real consequences this change will hold for everyone, even those with a Medicare card. A pensioner paying a private health insurance premium is not saying they are too elite for Medicare; they are trying to make sure that they have another option when they need care.

They are trying to ensure that those who genuinely need free health care can access it. For someone on a fixed income, maintaining that option can require real sacrifice. I have met pensioners who tell me they go without luxuries like dining out, because they consider their health care worth protecting.

This is not elitism; this is personal responsibility and personal choice. If the argument is that everyone should simply use their Medicare card—well, Australians already do. But a Medicare card is not a hospital bed, a Medicare card does not build another operating theatre and a Medicare card does not shorten a public hospital waiting list.

The point of having a mixed health system is that Australians have more than one pathway to care. We should be strengthening that choice, not making it harder to maintain. And Labor's defence of this policy seems to be, 'We are simply bringing Australians over 65 into line with everyone else.' But the argument ignores why the higher rebate exists in the first place: older Australians are more likely to use health care.

I'll repeat that: older Australians are more likely to use health care. Their healthcare needs reflect that. The higher rebate recognises that reality.

Removing the additional rebate doesn't make those healthcare needs simply disappear. It simply makes the cover harder to afford. And older Australians are not the only ones who will be affected if private health insurance participation falls.

If people move into the public system, the pressure doesn't simply stay with these people. It spreads. It reaches the families waiting for an elective procedure.

It reaches the regional hospital already trying to manage limited beds and limited staff. That's why the states have taken notice. New South Wales, South Australia, Victoria and the Northern Territory have all raised concerns about the flow-on pressure to public hospitals.

And Queensland and Tasmania have gone further, calling for the cuts to be scrapped. These governments understand something the Albanese Labor government seems determined to ignore: you can't move pressure off one part of the health system without putting it somewhere else. This isn't really a debate about insurance; it is a debate about health system capacity.

Yet somehow, when Labor needs to find another few billion dollars, it's looking at the pockets of older Australians, and this is truly a shame. The coalition position is straightforward. We believe Australians should have a choice in health care.

We believe people who want private health insurance should be supported and it should be maintained. This will take pressure off the public system. We believe older Australians who have spent years paying premiums should not be treated as an easy source of savings simply because they have reached a certain age.

It is not too late. The government can still change course if it wants to. It can listen to older Australians and scrap this cut.

It can recognise that private health insurance is not the enemy of Medicare. It is one of the things that helps make the whole system work. This rebate reduction is fundamentally wrong, and it's wrong on so many levels.

It is wrong to make health care harder to afford for older Australians. It is wrong to put more pressure on the public health system. The public health system is already overstretched.

And it is wrong to treat the people who carry almost half of this saving as simply another line in the budget. After a lifetime of contributing to this country, older Australians deserve security. They deserve choice and dignity in their health care.

The answer should be to make their security stronger, not harder to afford. I ask and I plead with the Albanese Labor government to please reconsider this. Please give older Australians the dignity and respect that they deserve.