Government Plans to Cut Private Health Insurance Rebates for Older Australians

The federal government announced plans to reduce private health insurance rebates for Australians over 65, bringing them in line with rates for people under 65. Officials said the change would affect about 3.2 million older people, who would pay an average of $226 to $255 more per year. They estimated that 44,000 older Australians would drop their coverage as a result.

The government described the higher rebates for older Australians as a policy introduced in 2004. Officials said the change would address differences in government support based on age alone. The savings are projected at $3 billion over the forward estimates and $11 billion over about a decade. Officials said the funds would support an extra 5,000 aged care beds and at-home aged care services.

Disability pensioner Denise Peters said private health insurance had covered her hip and two knee replacements. "It's like a security blanket," she said. " Peters said she already eats only soup to save money and expects her food budget to tighten further.

She described the change as unfair to pensioners. National Seniors Australia chief executive Chris Grice said many older Australians cannot afford the increase. He estimated that a gold-level hospital policy for a couple over 70 would rise by $830 per year.

Grice said the policy would lead some older Australians to drop coverage, shifting costs to the public system. "That's going to tip many over the edge," he said.

State governments have raised concerns about increased demand on public hospitals. Officials in Tasmania noted the state already faces long wait times for elective surgeries. A Monash University health economist said the policy makes sense from a federal budget perspective but could shift costs if people delay care.

She said later treatment of conditions might increase expenses for the public system.