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

Mr BOYCE (Flynn) (12:32): Older Australians are facing another very real financial hit under this Labor government. This one will be felt right across the country, including by older Australians in regional communities that I represent in Central Queensland. The Albanese government wants to remove the higher private health insurance rebate for Australians aged 65 and over.

Let's be clear about what this actually means. From 1 April next year, Australians aged 65 and over will lose the additional age based component of their private health insurance rebate. The government says this will make the rebate fairer and better target assistance according to income.

That might sound great on paper, but what actually happens in the real world? What happens to a pensioner sitting at the kitchen table, trying to work out how they are going to pay another bill? What happens to a self-funded retiree who has paid for private health insurance for 30 or 40 years?

What happens when they can no longer afford the same level of cover? Do they cut something else? Do they downgrade?

Do they simply give up? If they give up, where do they go? Do they go back to an already overcrowded public health system?

That is what this government needs to answer, because older Australians do not suddenly stop needing health care when they turn 65. It is quite the opposite. As people get older, they are more likely to need hospital care and other health services.

That is one of the reasons that the higher rebate exists in the first place. We cannot simply ask how much money the government saves; we have to ask what happens next. This backward government legislation will affect around 3.2 million Australians aged 65 and over.

The government says the average increase in premiums will be around $250 a year. This is the Labor government's own figure. But an average is not a household budget.

An average does not tell you what happens when you're sitting at home looking at your electricity bill, your grocery bill, your rates, your insurance and everything else that has gone up. Then there is another bill that lands on the table. For a pensioner or a self-funded retiree living on a fixed income, every additional reoccurring cost matters.

According to the Australian Private Hospitals Association, a couple aged 70 with private health cover could face an additional $1,614 a year. For an individual, it could be up to $807 a year. That is not just loose change—not to somebody on a fixed income—and it does not happen in isolation.

Older Australians are already dealing with the rising cost of groceries, power bills, insurance, rates, rent, fuel and everyday essentials. So what do they cut? That is the reality.

Do they spend less at the supermarket? Do they stop doing something else? Do they downgrade their health insurance?

Do they walk away from private health cover altogether? The government estimates that around 44,000 fewer Australians aged 65 and over will have private health insurance by 2028-29 because of this change, but that figure is disputed. The government says around 44,000.

The insurance industry has pointed to higher estimates, including modelling cited by Medibank suggesting the figure could be as high as 91,000. Which is it? There is clearly uncertainty about how many people will ultimately leave private health insurance, but there is another part of this that I think is just as important.

What about the people who do not leave? What about the people who stay insured but downgrade? Cancelling private health insurance is not the only option.

Someone might move from gold cover to a lower level of cover. They might increase their excess. They might remove extras.

They might take whatever steps they can to keep the premium within their household budget. They still have private health insurance; they do not show up as a cancellation number. Their health care has still changed, and that matters.

The Australian Private Hospitals Association has warned that downgrading could be a significant response to increased premiums, and it has also warned that lower levels of cover may not provide the same cover for some procedures and treatments particularly relevant to older Australians. Surely that deserves some proper consideration. If we don't count the people who cancel their insurance, we are not looking at the whole picture.

What happens to those who downgrade? What treatments do they lose access to? Where do they go if they need something that their policy no longer covers?

Again, they may end up relying on the public health system. The government has also acknowledged that around 1.2 million pensioners will be financially affected by this change. Think about that.

These are not necessarily wealthy Australians. 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. Why is that?

That's because, for many older Australians, private health insurance is not some luxury. They have made a deliberate choice to keep it. They have budgeted for it.

They have sacrificed for it. They want a choice of doctor. They want some certainty around where they can receive their treatments.

They have spent years and sometimes decades paying for those premiums. Former Australian Medical Association president Dr Michael Gannon described affected patients as people who have decided to put their health insurance ahead of holidays and leisure pursuits. I think that gets to the heart of it.

For some Australians, their private health insurance is the holiday they did not take. It is the new car they did not buy. It is the money that they did not spend somewhere else.

They have made a choice; they have paid their premiums year after year. They did what governments encouraged them to do. Now, when many of them are retired and living on fixed incomes, the government wants to change the rules.

There is also another side, and that is our public hospital system. Australia has a mixed health system. We have Medicare, we have our public hospitals, and we have our private health system.

They all play a role. Private health insurance helps take pressure off the public system. That is just common sense.

Now, I'm not going to stand here and claim that every Australian who leaves private health insurance automatically turns up at the public hospital the next day—of course they don't do that—but surely we have to ask what happens when you deliberately make private health insurance more expensive for millions of older Australians? What happens next? The Australian Medical Association has expressed concerns that the claimed savings may not account for the broader costs across the health system.

The Australian Private Hospitals Association has also warned about the additional pressures on public hospitals. The states are all raising their concerns as well. That should tell the government something.

New South Wales, South Australia and Victoria have raised concerns about this change. The Queensland and Tasmanian governments have gone further and called for the measures to be abandoned. These governments are not all on the same side of politics, but they do have one very important thing in common: they all run public hospitals and they know what happens when the emergency department is full.

They know what happens when there are no beds. They know what happens when elective surgery waiting lists get longer and they have to deal with it. So when the governments responsible for running public hospitals are warning Canberra about the consequences of this policy, perhaps Canberra should listen.

Actions have consequences, and the shifting cost from Commonwealth government to state hospital does not make the cost disappear. Australians aged 65 and over accounted for more than 2.5 million private hospital admissions in 2024-25 according to the Australian Private Hospitals Association. More than 2.5 million!

Now, obviously, I'm not suggesting that these admissions would suddenly move to the public health system—they wouldn't—but it demonstrates something very clearly: older Australians are significant users of hospital services. If you change the financial incentives to keep those Australians privately insured, you had better understand what happens next. What happens if 44,000 leave?

What happens if 91,000 leave? What happens if tens of thousands simply downgrade? Does this affect private hospitals?

What does it do to public hospitals? What does it do to waiting lists and what does it mean for regional Australia? I represent a large regional electorate.

Health care in Flynn is not the same as health care in inner-city Brisbane, Sydney or Melbourne. People in Gladstone, in the central highlands, in the Banana shire, in the North Burnett region and in other communities across the electorate already know what it means to travel for health care. You cannot necessarily drive 10 minutes down the road to find another hospital.

You cannot simply choose another specialist around the corner. Sometimes people travel hundreds of kilometres. Sometimes families need accommodation.

Sometimes they have to take time off work. And sometimes they just wait. That is the reality of accessing health care across regional Australia.

So when governments make decisions here in Canberra that have potential to put more pressure on a hospital's capacity and waiting lists, regional Australians notice. They live with the consequences. The government says this measure will save around $3 billion over four years and that those savings will be redirected into aged care.

Nobody is arguing that aged care is not important—of course it is—but you have to look at the whole system. If the Commonwealth saves money over here but, as a result, state governments have to spend more money over there, what have we actually achieved? Have we saved any money or have we just moved the bill?

Somebody still pays and, ultimately, 'somebody' is the Australian taxpayer. The patient does not care which level of government pays for the hospital bed; they care whether there is a bed. They care whether they can get surgery.

They care whether they can see a specialist. They care whether they can get back on their feet. They care whether they can go home to their family, and that is what matters.

I would like to make another point. Australians have maintained private health insurance for decades, and did so under a system that encouraged them to do exactly that. They made financial decisions around it, they budgeted for it and they paid their premiums.

They sacrificed other things to keep it. Many did so because they wanted to take responsibility for their health care and reduce their reliance on the public system later in life—and they did the right thing. Now, many of them are retired.

Their income has changed, their ability to simply earn more money to meet another increase has changed, and so that is when this government decides to remove the additional rebate. It makes no sense. The coalition supports choice.

If somebody has worked hard throughout their life and paid for private health insurance for decades, why shouldn't we encourage them to maintain that cover if they choose to? We should not be making it harder. Nobody is suggesting the private health system should replace our public health system, it shouldn't, but Australia needs both.

We need a strong public hospital system, we need a viable private hospital system, and we need Australians to have genuine choice when it comes to their health care. You cannot make major change to one side of the system and simply assume that nothing happens on the other side. That is why the government needs to listen.

It needs to listen to older Australians, listen to pensioners and listen to the states that actually run our public hospitals. It needs to listen to doctors, private hospitals and insurers and properly examine what happens when people downgrade their cover, not just when they cancel it. The government's own impact analysis recognises that downgrading is a possible response.

So where is the full picture? The Senate Community Affairs Legislation Committee is examining this legislation, and its report is due on 7 October. There is still time to get this right.

There's still time to look properly at the evidence. And there is still time to consider what this means for pensioners, for self-funded retirees, for regional Australians and for the broader health system. There is still time for the Albanese government to reconsider this measure, because behind all of these numbers are people—pensioners who have paid for private health insurance for decades, couples who have gone without elsewhere so they could maintain their cover, the retiree who wants peace of mind knowing that they have another option if they need surgery and regional Australians who already have to travel to access health care.

These Australians have worked hard. They've paid their way. They've contributed to this country.

And many have spent a lifetime making responsible decisions about their health and their finances. They deserve to have those decisions respected. This is really quite simple: if Australians have worked hard and maintained private health insurance throughout their working lives, we should not punish them for having done so when they retire.

They paid their premiums, they made their choice, they did their part, and now the government needs to do its part and reconsider this cut.