Australian Unity backs rebate cut affecting 3 million older Australians
Australian Unity faces a policy shift that could lift private health insurance costs by up to $250 a year for older members, as the federal government moves ahead with cutting higher rebates for Australians aged 65 and over. The change would align them with people under 65 and affect about three million older Australians.
The rebate cut was announced before last week’s budget, and Mark Butler said on Tuesday the government would push ahead despite backlash and community concern. Labor has said the move could also lead 44,000 people to drop their cover, a small share of the wider cohort but enough to trim demand at the margin.
Butler says $3m funds aged care beds
At the National Press Club on 22 April, Butler said the policy was “not fair between generations” and said it would recoup $3m over four years. He said the money would be spent on increasing the number of beds in aged care homes, tying the rebate change directly to aged care funding rather than general budget repair.
The government’s plan removes the higher rebate for people aged 65 and over and brings them into line with those under 65. For older Australians who hold private cover, the change hits the premium calculation itself, with Labor anticipating the maximum annual cost increase at $250.
Duckett sees little system impact
Dr Stephen Duckett said the broader health system would barely feel the effect. “There’ll be almost no impact on the public health system,” he said, adding, “Even the government’s projections of the number of people who might drop health insurance is quite small.”
He also argued, “It had more or less no impact when it was introduced, so it’s going to have almost no impact when it’s taken away,” pointing to the rebate’s limited effect on coverage behaviour. Duckett said the estimated 44,000 people who could ditch their insurance were spread across eight states and territories, which dilutes any pressure point in one location.
Ageing Australians face the bill
Patricia Sparrow, chief executive of the Council on the Ageing, said the group had serious concerns about the extra pressure the changes would place on older Australians already absorbing the rising cost of living. That puts the policy in direct conflict with retirees who have to decide whether to absorb the premium rise or cut back on cover.
Butler acknowledged that trade-off on Tuesday, saying, “I recognise this is an unwelcome change for many older Australians,” and that continuing to pay a higher subsidy by age rather than income was hard to sustain. For people already on private cover, the immediate next step is simple: check whether the insurer’s new premium reflects the lower rebate, because the government is moving ahead and the price change is the point of the policy.
