Impact on Seniors and Low-Income Australians
Health insurers in Australia are urging the government to maintain private health insurance rebate discounts for Australians over 65 with low incomes, including those on the Age Pension. This follows proposed changes that could see vulnerable groups facing higher premiums.
Private Healthcare Australia, representing health insurers, warns that the changes could lead to pensioners and low-income older Australians dropping or downgrading their coverage. The group highlights that around 39 per cent of insured Australians earn less than $55,000 annually, including over 900,000 older adults.
Dr Rachel David, CEO of Private Healthcare Australia, stated, "Many of these people have annual incomes under $30,000 and many of them are in rural and regional Australia. While we recognise the Government’s equity rationale for aligning rebate rates for those over and under 65, the reality is this broad-brush approach will make private health insurance unaffordable for thousands of vulnerable Australians."
Proposed Reforms and Concerns
Health insurers are recommending that the government retain higher rebate levels for Australians earning less than $55,000 a year. They suggest removing age-based differentials within each rebate tier, arguing that the changes could increase pressure on the public hospital system.
Dr David noted that government modelling anticipates approximately 44,000 people may drop their private coverage. She expressed concern that those most affected would have higher healthcare needs, further straining public resources.
The organisation also supports reducing rebates for higher-income retirees, suggesting that funds be redirected to low-income Australians. "Reducing rebates for older Australians on six-figure incomes is sensible. Many do not require additional support," Dr David mentioned.
In response to the announcement by Federal Health Minister Mark Butler, PHA is advocating for a broader reform package. This includes increasing the Medicare Levy Surcharge for higher-income earners and simplifying rebate tiers from 2027. The reforms also aim to lower private healthcare costs by reducing medical device prices from 1st July 2026.
Dr David concluded, "Our initial estimates suggest this package would achieve around 70 to 75 per cent of the Government’s revenue target while significantly improving equity."
The changes come as part of the Government's aged care cost-of-living measures announced yesterday. PHA is particularly concerned about the impact on older Australians living in rural and regional areas where access to public healthcare services is already limited. The organisation emphasises that maintaining adequate rebates for this group is crucial to ensure they can continue to afford necessary healthcare coverage.
