Analysis confirms private health insurance cuts target vulnerable pensioners

New analysis by the Parliamentary Budget Office (PBO) shows that half of the $3 billion dollars the Albanese Government expects to save from scrapping private health insurance rebates for over-65s will be clawed back from pensioners.

“The PBO has confirmed what older Australians and the private health sector have feared: these cuts will disproportionately affect those least able to afford them,” said Dr Monique Ryan, Independent Member for Kooyong. “After paying taxes throughout their working lives and maintaining private health insurance to meet their health needs as they age, age pension recipients will bear the brunt of the government’s changes.”

The PBO has found that $1.6 billion of the total budget savings of $3 billion by 2029-30 would be met by the nearly 1.5 million age pensioners who hold private health insurance.

Queensland, Tasmania and New South Wales governments have all told Federal health Minister Mark Butler the that this cut is not about fairness, it’s Canberra dumping older Australians onto public hospitals and expecting the states to pick up the bill.

Most submissions to the recent committee inquiry into this legislation opposed it.

Private Healthcare Australia has warned the government’s cuts will cost some retirees more than $1600 per year, while National Seniors Australia finds the average cost could be more than $1000 a year for older couples with Gold cover. Australian Institute of Health and Welfare analysis identifies a gender gap in age pension recipients with 58% of women over 65 needing support, compared with 53% of men.

“This is a cash grab aimed at older Australians on low and fixed incomes during a cost-of-living crisis,” emphasised Dr Ryan. “Many will be forced to drop private health cover at the time in their life when they need it most. Others will downgrade their cover. Both outcomes will increase pressure on our already-stretched public hospitals. That cost has been ignored in the government’s calculations of savings from this measure.”

Dr Ryan has expressed strong concerns about stripping rebate support from elderly Australians, arguing that it is an insult to people who have made valuable contributions throughout their working lives and planned and saved for their retirement. In her view, the policy treats age pensioners unfairly by shifting responsibility for the cost of their care from the federal government onto the states and will ultimately cost more than it saves.

Later this week Dr Ryan will move an amendment to the Bill to protect pensioners from losing the rebate.

“There’s no doubt our private health insurance system needs reform,” said Dr Ryan. “Every year we pay more and get less from it. But penalising those least able to absorb cost increases will achieve nothing but loss of faith in government from vulnerable older Australians.”

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