Labor’s bid to cut the private health insurance rebate for over-65s has been blocked in parliament, with the Greens insisting they will withhold support unless pensioners receive a carve-out from the new rules. The proposed changes, which would take effect from April 2027, would save the federal budget $3bn. It marks another defeat for a key cost-saving measure after the government was forced to back down on its plan to cap allied health payments for veterans which would have saved $748m over three years.
People who are 65 or over currently receive a larger rebate on their premium, with the rebate higher for those 70 and over. The Greens, Coalition and crossbench senators teamed up in the Senate on Wednesday to block Labor’s bill. In a rare move, the bill was discharged from the upper house, meaning it will need to be reintroduced if Labor tries to push ahead.
The health minister, Mark Butler, said the government planned to reintroduce the same bill to parliament on Thursday. Almost 80,000 older Australians are expected to ditch their private health cover by 2028-29 as a result of the Albanese government’s proposal, according to health department modelling released under freedom of information laws. The Greens leader, David Shoebridge, said the party would only offer its support for the changes if the government excluded pensioners.
But we will not be joining with Labor to punch down on pensioners in the middle of a cost of living crisis.” Butler said the new Greens leadership “spied a political opportunity” to team up with the Coalition. The chief executive of the Council on the Ageing Australia, Patricia Sparrow, rejected the planned savings being linked to aged care funding commitments. Nor should they be asked to choose between affordable healthcare and a properly funded aged care system,” she said.
The shadow health minister, Anne Ruston, said the policy would have affected up to 1.5 million pensioners. The proposal has been criticised by the states and territories, which warn their health services will come under increasing pressure. The Victorian health minister, Ingrid Stitt, said she had raised concerns with Butler, vowing to oppose “any move that makes it harder for Victorians to get the care they need”.
The New South Wales health minister, Ryan Park, said the state was already experiencing “significant pressure” on its public health system due to the commonwealth’s failure to provide sufficient aged care placements. The Queensland health minister, Tim Nicholls, said the “additional pressure will come at the expense of the thousands of older Australians already stuck in hospitals right across the country”. The Tasmanian health minister, Bridget Archer, said the federal government was “already refusing to provide solutions to get aged care patients out of hospital and this dog of a policy will make things even worse”.
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