Labor condemned for bill to cut private health insurance rebate

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 Greens leader, David Shoebridge, said the party would only offer its support for the changes if the government excluded pensioners. 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 chief executive of the Council on the Ageing Australia, Patricia Sparrow, also rejected the planned savings being linked to aged care funding commitments. She explained that older Australians shouldn’t have to choose between protecting their health and paying for everyday essentials, nor should they be asked to choose between affordable healthcare and a properly funded aged care system.