The Albanese government’s plan to cut private health insurance rebates for older Australians has suffered a major parliamentary setback, after the Coalition, Greens and independent Senator Jacqui Lambie backed a motion to remove the legislation from the Senate’s agenda.
The proposed changes would reduce the private health insurance rebate available to Australians aged 65 and over from April next year, with the government expecting to save $3 billion over four years to fund other aged care services.
Health Minister Mark Butler vowed to press ahead with the policy, announcing at a snap press conference on Wednesday afternoon that the government would reintroduce the same legislation on Thursday.
“This is an absolute travesty … that flies in the face of what I thought was a clear understanding across the parliament of the need to fund better aged care services,” Butler said.
He criticised what he described as a “rush of blood to the head” by the Greens’ new leadership, accusing the Senate of allowing the bill to be removed rather than engaging in a reasoned debate.
However, with the Coalition vowing to oppose the legislation, the government had been relying on the Greens to help secure its passage through the Senate.
Shadow Health Minister Anne Ruston urged Butler to abandon the proposal.
“Don’t try to sneak this cut back onto the agenda. Drop it for good,” she said.
“Today the Senate stood with older Australians. Labor was left standing alone with its cuts.”
The Senate’s move was welcomed by COTA Australia, which represents the interests of older Australians.
Chief executive Patricia Sparrow said the decision showed parliament had listened to concerns raised by older people, particularly those on low and fixed incomes.
“Parliament has listened to the concerns of older Australians and the evidence put forward in the Inquiry, and we’re urging the Federal Government to do the same,” Sparrow said.
COTA said its research found the proposed changes could force older Australians to sacrifice essential spending to maintain their private health insurance.
“Our research showed just how devastating these changes could be, with older Australians telling us they would be forced to cut back on food, medicines, healthcare and other essentials just to keep their private health insurance,” Sparrow said.
“One in three told us they would cancel or change their cover altogether.”
She warned that people dropping or reducing their cover could add pressure to Australia’s already stretched public health system.
Sparrow also rejected the government’s argument that reducing the rebate was necessary to help fund aged care, saying older Australians should not have to choose between affordable healthcare and properly funded aged care services.
COTA welcomed Butler’s renewed commitment to aged care funding but urged the government to reconsider the rebate proposal and ensure any future changes did not leave older Australians worse off.
Although the Senate has removed the bill from its agenda, the government’s plan is not necessarily dead. Butler’s pledge to reintroduce the legislation means the dispute over the cost of private health insurance for older Australians is set to continue.
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