Dr Monique Ryan calls for more transparency over private health insurance reforms.

Dr Monique Ryan, Independent Federal Member for Kooyong, has condemned the Albanese Government’s proposal to remove age-based private health insurance rebate tiers for Australians over 65, calling for proof the government’s proposed changes will save the health system more than they cost.  

Last week, the government proposed removing age-based private health insurance (PHI) rebate tiers to save the government approximately $482 million per year. Federal Minister for Health, Mark Butler, has claimed the $482 million in extra premiums will be paid by 1.4 million older Australians affected by the government’s changes—many of whom are retirees on modest fixed incomes—through effective premium increases of up to $640 per year. 

Dr Ryan is concerned changes to the PHI rebate tiers could increase premiums for older Australians, reduce participation in private cover among seniors, and shift demand and costs onto the public hospital system. 

Says Dr Ryan: “The age-based rebate is a partial offset for the higher premiums older Australians face because of their healthcare needs. Removing it will increase costs for the people least able to absorb them, while doing nothing to address genuine equity gaps in the private health insurance system. 

“The government is claiming the measure is about intergenerational fairness, however the evidence does not support that claim. Minister Butler must release the government’s modelling in full and explain why the government seems to be proceeding against its own advice.” 

While removing higher age-based rebates would save the government approximately $482 million per year, it has been suggested the proposed changes could generate as much as $547 million in additional public hospital costs as older Australians are forced to give up private coverage and shift onto the public system.  

Dr Ryan: “The government is cutting support for older Australians who have maintained their insurance, often over several decades. Moving these people over to the public health system will have adverse health impacts for older Australians and strain the very system PHI is designed to alleviate pressure from. 

“If the government is genuinely looking for fiscally responsible savings, better options are available. We could get a fair return on our oil and gas exports, we could wind back the $5 billion per year spent on diesel fuel rebates handed to big mining companies, and we could stop giving billions to the US for imaginary submarines.”   

The government previously considered analysis—commissioned by the former Coalition government and conducted by consultancy NEAA Associates—which found that paying the higher rebates to Australians aged over 75 represented a net saving to the Commonwealth of approximately $4,891 per person, because the costs avoided in the public hospital system far outweighed the rebate paid. That report concluded the current PHI subsidy policy was a “very good financial deal for the government”. 

Dr Ryan: “Minister Butler now says he’s relying on new government modelling with different conclusions, including a projection that only 0.4% of the insured market will drop its cover, but he hasn’t released that modelling. I’ve written to Minister Butler calling on him to do so, and to redesign the measure to protect lower and middle-income older Australians. 

“The minister is asking Australians to accept a significant cut to their health support based upon modelling he refuses to release. If the government’s numbers are sound, publish them. The department’s own previous analysis found paying higher rebates to older Australians saves the Commonwealth money. Australians deserve to know whether the new modelling genuinely contradicts that, or whether it simply ignores the public hospital cost offset entirely.  

“The choices governments make reflect what they really value. Targeting older Australians on fixed incomes is a choice, not a necessity. They might be an easier target than the fossil fuel and mining industries, but the government should stop punching down on older Australians for pocket-change savings, while ignoring fairer and more substantial sources of revenue.”