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

Ms PENFOLD (Lyne) (11:06): I rise to speak on the Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026. I want to start with the title of this bill because I find it offensive, as so many other older Australians do. 'Modernising the private health insurance rebate'—there's nothing modern about making older Australians pay more for their health care.

There's nothing modern about taking support away from pensioners. There's nothing modern about forcing people on fixed incomes to choose between paying their private health insurance premium, paying their electricity bill, buying groceries and filling a prescription. And there's certainly nothing modern about a government that recklessly squanders taxpayers' dollars only to turn around and ask older Australians to help balance the books.

Calling something 'modern' does not make it better, it does not make it smarter, and it certainly does not make it fairer. Let us call this bill what it actually is. It's a cut to the private health insurance rebate for older Australians.

From 1 April next year, the higher rebate available to Australians aged 65 and over will be removed. I've spoken in this parliament before about what these changes mean for people in my electorate of Lyne, and I said in May that the reduction in the private health insurance rebate was nothing short of a stab in the back. Since then, nothing I have heard from the government has changed my mind.

In fact, the more we learn about this proposal, the worse it gets. The government itself acknowledges that millions of older Australians will be affected, but it doesn't seem to care. Private health insurance is not some luxury exclusively held by wealthy retirees.

National Seniors Australia has found that as many as 45 per cent of people whose sole source of income is the age pension maintain private health insurance. That should stop members opposite in their tracks. People living entirely on the pension are making room in their very tight household budgets for private health insurance because they believe it is important to their health and their security.

National Seniors Australia is firmly opposed to this bill. Its research tells us just how strongly older Australians feel about it. In a survey of more than 5,400 older Australians, 91 per cent opposed cutting the rebate to fund aged-care reform.

National Seniors Australia says the issue has generated extraordinary anger amongst older Australians and has pointed out that it actually had been advocating for a higher rebate for lower income seniors because affordability was already a problem. Clearly, National Seniors Australia is listening to older Australians. When is this government going to do the same?

When is it going to start listening? When is it going to start listening to people like Warren from North Haven in my electorate, who wrote: At a time when things are already incredibly hard, and everyday Australians are struggling just to maintain a reasonable standard of living, this policy is yet another massive financial hit. The Albanese government needs to wake up and be realistic about the financial pressure people are under.

If these cuts go ahead, it will completely defeat the purpose of having private health. Frankly, this is the breaking point… it will push me to give up my private health fund entirely, and I know I won't be the only one forced to do so. When is this government going to start listening to people like Candy from Laurieton?

She wrote to me to say that, without private health insurance, her husband would have died waiting in the public health system. Candy, who was her husband's carer, has had to go back to work just to pay the bills and, after nearly 50 years of paying for private health insurance, is looking at having to let their cover go. When is this government going to listen to people like Ann from Beechwood, who said that she and her husband have always had private health insurance but because of this rise in price, sadly, will have no choice but to cancel their policy, putting two more people into an already stretched public health system?

When is the government going to listen to the thousands of people who've signed online petitions and my paper petition as well, calling for the government to axe and bin this dreadful policy? I've spoken previously in this parliament about Lorraine from Forster-Tuncurry, who said: I thought I was doing the right thing by always having private health insurance but now feel totally betrayed and misguided by this government.

Those words matter: 'I thought I was doing the right thing.' That goes to the very heart of this debate, because these are Australians who did exactly what governments told them to do—take responsibility, plan ahead, save, insure yourself and reduce your reliance on the public system where you can. And, after decades of doing exactly that, Labor changes the rules.

Alarm bells are ringing across the Australian health system in response to this bill. Private hospitals are already operating under enormous pressure. If private hospital activity falls, regional facilities will become even less viable.

Once a private hospital service disappears, once specialists leave a regional community, rebuilding that service is extraordinarily difficult. That should deeply concern every regional member of this parliament. People in Lyne understand exactly what limited private health and health choice means.

We already struggle to attract specialists. We already see people travelling considerable distances for treatment. We already have enormous pressure on Manning Base Hospital and Port Macquarie Base Hospital.

We already have patients waiting for procedures, and here we have the Albanese Labor government proposing something that national medical organisations warn will make our existing problems worse. What the government is doing makes absolutely no sense. Catholic Health Australia, one of this country's largest non-government providers of hospital, aged-care and community services, has warned that the government has not adequately assessed the potential cost shift onto public hospitals, aged care and private hospitals, particularly regional facilities.

It has called for further analysis before the government proceeds. Catholic Health Australia has undertaken its own modelling of the consequences. Its modelling suggests that changes could drive around 200,000 people to downgrade their private health insurance and impose an additional $675 million a year on public hospitals.

It is also warning that the viability of some private hospitals could be put at risk. That is an extraordinary warning for the government to ignore. The Australian Private Hospitals Association has described the government's approach and analysis as flawed.

Private Healthcare Australia has warned that reducing support flowing directly to patients will hurt consumers, put further strain on the private hospital sector and affect the viability of services. The Members Health Fund Alliance, representing not-for-profit and member owned funds, has also opposed the bill. National Seniors Australia opposes it.

The Australian Medical Association opposes the policy in its current form. Catholic Health Australia has serious concerns. Patients Australia has joined the campaign.

So has the Medical Technology Association of Australia. In fact, nine national medical, hospital, health fund and consumer organisations joined together to write to the Prime Minister and the health minister arguing against this change. These organisations do not agree on everything.

They represent different parts of the health system, but they can see the danger in what Labor is proposing. Perhaps the government should ask itself why. This basic policy problem is very simple.

Removing private health insurance does not remove illness. It does not eliminate demand for health care. If somebody drops their private health, their hip still needs replacing, their cataracts still need treating, their cancer still needs treatment, and their heart condition still needs a cardiologist.

The patient does not disappear. The cost does not disappear; it moves. And, overwhelmingly, it moves towards a public hospital system which is already under enormous pressure.

That is why the government's own modelling deserves much greater scrutiny. The government estimates that only around 44,000 fewer older Australians will hold private health insurance than otherwise would have. But the material provided to us shows that Medibank has pointed to external modelling suggesting the number leaving cover could be more than double that, up to 91,000.

Medibank, HCF and Bupa have jointly warned that poorer retirees and older regional Australians are likely to be particularly exposed and that a smaller insurance pool risks increasing premiums for the Australians who remain insured. The Australian Medical Association is not convinced that this measure will result in genuine net savings once the additional cost imposed on public hospitals is taken into account.

That is the problem. The Commonwealth may make its spreadsheet look better, but somebody else gets the bill. State hospitals get the bill.

Private hospitals get the bill. Other policyholders will get the bill. And, ultimately, patients get the bill.

That is not reform. That is just cost-shifting. Remarkably, state governments understand this too.

Labor governments in New South Wales, Victoria and South Australia have opposed the change. Coalition governments in Queensland and Tasmania have opposed it. When governments of both political colours—the governments actually responsible for running the public hospitals that will carry the additional load—are warning Canberra about the consequences, perhaps Canberra ought to listen.

Then comes perhaps the most cynical part of the government's sales pitch. We are told this money is going to aged care. Forgive Australians for being sceptical.

No-one I speak to believes that taking money out of the private health insurance rebate provides any guarantee whatsoever that their mother will receive a home care package sooner or that their father will get an aged care-assessment more quickly. Where is the guarantee? Where is the direct connection between the pensioner paying hundreds of dollars more for private health insurance and improved aged-care services in the community?

Even the Australian Medical Association, while supporting increased funding for aged care, says it should not come at the expense of older Australians' access to health care. That is the point. Health care and aged care are not rival causes.

Older Australians should not be told, 'We can improve your aged care, but first we will make your health care more expensive.' That's an absurd choice. People no longer accept the proposition that every new government tax, cut or charge will somehow produce a better service down the road. They judge governments by what they actually experience: the hospital waiting lists, the shortage of doctors, the aged-care waiting lists and the rising premiums.

People in their 60s, 70s and 80s cannot simply go out and dramatically increase their income. They cannot work another shift. They can't negotiate another promotion.

They cannot simply absorb hundreds of dollars of additional household costs without something else giving way. So what gives way? Is it the insurance?

Is it the groceries, the dental care or heating the house? Is it the specialist appointment or seeing the grandchildren? These are the real choices this bill creates.

There's something else I reject in the government's argument: the suggestion that giving older Australians a higher rebate is somehow unfair to younger Australians. This is not a competition between generations. Older Australians receive a higher rebate for a rational policy reason.

They use more health care. Keeping them privately insured takes pressure off the public system. And who benefits from that?

Everyone. Generational fairness is not achieved by making one generation worse off. A health system works when its public and private components support each other.

Weakening one ultimately puts greater pressure on the other. Perhaps that is what bothers me most about the title of this bill—'modernising'. Governments have become very fond of euphemisms.

A cut becomes a reform. A tax becomes a contribution. Taking something away becomes modernisation.

But changing the language does not change what happens to the person paying the bill. There is nothing progressive about making health care less affordable to an 80-year-old pensioner. There's nothing innovative about forcing a retired couple to reconsider insurance they may have held for 30 or 40 years.

There's nothing clever about pushing patients from private hospitals onto already overcrowded public hospital waiting lists. And there's absolutely nothing fair about asking Australians on fixed incomes to solve a spending problem created by Labor in Canberra. When National Seniors, the Australian Medical Association, the Australian Private Hospitals Association, Catholic Health Australia, not-for-profit health funds, consumer organisations and private health insurers are all warning you, and when Labor and coalition state governments alike are warning you, perhaps the problem is not that everybody else has misunderstood the policy.

Perhaps the policy is wrong. This government should withdraw this cut. It should stop pretending that changing the name changes the substance.

It should stop trying to manufacture a generational argument to justify budget savings. And it should stop treating older Australians who have done the right thing for decades as the next place to find money. The coalition will fight this measure.

We'll fight for choice. We'll fight for a strong and sustainable private health system. We'll fight against further pressure being placed on our public hospitals.

Most importantly, we will fight for older Australians who worked, saved, contributed, fought, did the right thing and deserve much better than this from the Albanese Labor government.