This week we highlighted concerns about proposed changes to private health insurance rebates for older Australians that could increase pressure on public hospitals and undermine already struggling private hospitals.
In our submission to the Senate Community Affairs Legislation Committee inquiry into the Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026, we urged the government to protect older Australians on lower incomes by exempting those on the Medicare Levy Surcharge base-tier incomes from the proposed changes.
We supported the government’s efforts to secure additional funding for aged care, but this should not come at the expense of older Australians’ access to healthcare.
The government’s recognition that aged care requires greater investment is welcome, but older Australians should not be forced to pay for that investment through higher private health insurance costs.
Many older Australians have maintained private health insurance for decades. Removal of the higher rebates for people aged 65 and over, particularly those who are on lower incomes, risks making that cover less affordable at a time when they are most likely to need healthcare.
The government has indicated savings from the measure would help bolster funding for aged care. However, we are concerned the projected savings fail to account for the broader costs the measure is likely to impose across the health system.
The government’s own analysis acknowledges this measure is likely to reduce private health insurance participation and increase demand on public hospitals.
The proposal could also have serious consequences for private hospitals, particularly smaller and regional facilities already operating under significant financial pressure. Once a private hospital service is lost, or specialists leave private practice, it can be very difficult to rebuild that capacity, creating long-term consequences for patient access.
The AMA has called on the committee to recommend an amendment to the Bill to preserve existing rebate arrangements for older Australians on Medicare Levy Surcharge base-tier incomes.
