Pensioners Could Bear Half the Cost of Labor’s Private Health Rebate Cuts, PBO Finds - Aman Shanti News

Monique Ryan the Teals MP for the seat of Kooyong speaks during a community candidates’ forum in Melbourne, Australia on April 24, 2025. Asanka Ratnayake/Getty Images

Federal teal MP Monique Ryan says she will move an amendment this week to shield pensioners from a budget measure that strips age-based private health insurance (PHI) rebates from over-65s.

Ryan referenced a Parliamentary Budget Office (PBO) analysis she commissioned that found pensioners could bear the cost of roughly half the government’s expected savings.

“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,” Ryan said.

“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 analysis (pdf) found the “Modernising Private Health” Bill would save the government $2.995 million (US$2141.81 million) over the four years to 2029-30 by removing the existing age-based rebate uplift from April 1, 2027.

The base rebate rate, currently 28.139 percent for those aged 65 to 69 and 32.158 percent for those 70 and over, would be cut to the standard 24.118 percent for both groups.

Of the total savings, $1.564 million would come from Age Pension recipients and $1.58 million from non-pensioners aged 65 and over, with PHI holders under 65 producing a net cost to government of $148.8 million over the period.

The PBO put the affected population at 131,000 pensioners and 816,000 non-pensioners aged 65 to 69, and 1.36 million pensioners and 1.28 million non-pensioners aged 70 and over.

If extended to 2036/37, cumulative savings are projected at $10.974 million.

The move has also raised concerns about the potential effect on public hospital waiting lists, with Queensland Health having estimated an additional 15,000 cases may be added to the exsiting backlog of 60,000.

Ryan said most submissions to the parliamentary committee inquiry opposed the legislation, and cited modelling from Private Healthcare Australia putting some retirees’ extra costs above $1,600 a year, and from National Seniors Australia (pdf) estimating over $1,000 a year for older couples with gold-tier cover.

“This is a cash grab aimed at older Australians on low and fixed incomes during a cost-of-living crisis,” Ryan said.

“Stripping rebate support from elderly Australians is an insult to people who have made valuable contributions during their working lives … This policy treats age pensioners unfairly. It shifts responsibility for the cost of their care from the federal government onto the states and could well end up costing more than it saves.”

Coalition shadow minister for health, Anne Ruston, a co-signatory of Ryan’s statement, has attacked the measure repeatedly.

Speaking in the Senate on May 12, she called it “the worst piece of policy I have ever seen” and “the biggest public policy con that we have seen in this country for a very long time,” arguing an independent Finity Consulting report found it would be a net cost to taxpayers by shifting older Australians onto a public system funded by younger workers.

And in a July 31 statement, Ruston said “older Australians on fixed retirement incomes are the least able to respond to a price shock like this,” citing Finity modelling putting the net cost to public hospitals at $1.20 for every $1.00 saved—against the government’s own estimate that 44,000 people would drop cover.

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