Changes to PHI for 65+ age cohort a 'disaster-in-waiting'

THE Albanese Government's breach of faith on two decades of making private health insurance more achievable for those using it the most, is a disaster waiting to happen. Not just for older Australians with the rug pulled from under them but for everyone, private hospitals warn.

Slashing the rebate will see a couple aged 70 pay $1,614 a year more next year. It is staggering that retrograde legislation affecting 3.2 million older Australians has reached Parliament without any consultation with anyone. Public policy in a vacuum rarely ends well.

"The federal government's claim that there is no policy intent behind the higher rebate for older Aussies is just plain wrong," APHA CEO Brett Heffernan said. "The higher rebate recognises that eligible pensioners, part-pensioners and self-funded retirees are on low fixed incomes, less able to cope with sharp cost changes, but they are also high users of high-end hospital services.

"Keeping this age cohort in private health insurance saves the public system from collapse. This change is a half-baked cash grab that sends the entire health system into a downward spiral.

"In 2024-25 those 65 and older accounted for over 2.5 million private hospital admissions. It's not rocket science that any portion of that caseload shifting to public hospitals can only make public Emergency Department dysfunction, bed block, waiting lists and taxpayer costs worse.

"The government's refusal to release modelling for the assumption that only 44,000 will cancel their health insurance entirely, while admitting to not even considering how many will downgrade from Gold to lesser coverage, and the failure to consult with anyone at all, beggars belief.

"Downgrading isn't a side issue. It's the most likely response from older people to manage the looming exorbitant surge in their premiums. The government's Impact Analysis acknowledges the risk but does not bother modelling what it means for patients or the hospital system.

"With many dumping their health cover entirely, while more are expected to downgrade, the pressure on families and hospitals compounds. At Silver and below, health insurance doesn't cover the things older patients need like removal of cataracts, joint replacements or mental healthcare.

"Downgrading will still see them either remortgaging their homes to pay for tens of thousands in medical bills or be added to the public system where the current wait times for cataract surgery is up to two-and-a-half years, typically two-to-three years for joint replacements and acute mental care is a year or more if you can get a consultation.

"That's a long time to have your sight impaired, suffer from an acute mental disorder or be immobile, in pain and often isolated. We also know these waits lead to people developing co-morbidities and deteriorating mental health.

"It doesn't stack up economically either. Federal and state governments are funding public hospitals to the tune of some $450 billion over five years. The cost savings of $3 billion over four years by pulling the rug from under older people disappears quickly as public patient loads soar.

"The abolition of the higher private health insurance rebate for Australians aged 65 and over is built on zero consultation, untested assumptions, incomplete modelling and an Impact Analysis that overlooked the policy's most significant consequences. It is unjustifiable on any level. Private hospitals are urging the Senate Standing Committee on Community Affairs to reject the Bill."

-ENDS-

The APHA's full submission is available at to the Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026.

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