The Australian Greens are right to raise concerns about the impact the Government’s planned private health insurance rebate cuts will have on older Australians, including up to 1.5 million age pensioners, health insurers say.
Private Healthcare Australia (PHA), the peak body for health funds, is urging the Government to reconsider the proposal following the release today of the Senate Community Affairs Legislation Committee report into the Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026.
While the committee’s ALP majority recommends the Bill be passed, both the Greens and Coalition dissenting reports identified serious concerns about its consequences for older Australians and the health system.
The Parliamentary Budget Office estimates that approximately 1.5 million age pensioners will be affected by the rebate cut and will bear around half of the policy’s financial burden.
PHA Chief Executive Officer Dr Rachel David said the concerns raised by the Greens about pensioners and Australians on fixed incomes should serve as a warning to the Government.
“The Greens are right to question whether cutting private health insurance support for older Australians is the right way to fund aged care reforms,” Dr David said.
“This policy will hit older Australians who are living on fixed incomes and have very limited capacity to absorb additional costs. Many of these people have maintained private health insurance for decades because governments encouraged them to do so, and now they’re going to be forced to pay more when they are likely to need to use it.”
The Greens warn that pensioners and part-pensioners may struggle to afford higher premiums and could be forced to downgrade their cover or cut spending on essentials such as food, heating and cooling. It also highlighted concerns about additional pressure on public hospitals if older Australians leave private health insurance.
Dr David said these concerns echoed evidence heard throughout the inquiry.
“Taking almost $3 billion out of the pockets of older Australians will inevitably force some people to make difficult choices about maintaining their health cover,” she said.
“Australians should not have to choose between paying their health insurance premiums and paying household bills.”
The Coalition dissenting report also identified significant shortcomings in the proposal, including inadequate consultation, limited modelling of health system impacts, failure to properly assess the consequences for pensioners, and risks to regional private hospitals and public hospital waiting lists.
“This debate is ultimately about whether Australia should be making healthcare more affordable or less affordable for older people,” Dr David said.
“When concerns are being raised not just by health insurers, but by pensioners, doctors, hospitals, state governments, the Coalition and now the Greens, the Government should take a step back and reconsider. There is still time to find a better way to support aged care without making private health insurance more expensive for 1.5 million pensioners and millions of other older Australians.”
About us:
Private Healthcare Australia is the peak representative body for Australia’s private health insurance industry. PHA represents more than 20 Australian health funds and 15 million Australians (55% of the population) who have private health insurance.
