More than three million older Australians face steep private health insurance premium increases under proposed federal government changes – and the peak body for private health funds is warning the consequences could be felt far beyond household budgets.
Private Healthcare Australia (PHA) has put the Albanese government on notice that its planned changes to the private health insurance rebate for older Australians could threaten the survival of dozens of regional private hospitals that communities depend on for essential care.
Under the proposed changes, many Australians aged over 65 on low and fixed incomes will receive a reduced private health insurance rebate – meaning they will pay more out of pocket for the same cover. More than 400,000 pensioners with private health insurance are among those affected.
The numbers are confronting. Australians aged 70 and above with Gold hospital cover could see premiums surge by 21 per cent from next April. For an individual, that translates to an extra $807 a year. For a couple, $1,614.
The government has forecast around 44,000 older Australians will drop their private health insurance as a result – but PHA says the assumptions behind that figure have not been made public, and health funds believe the real number could be significantly higher. Many more are expected to downgrade from Gold policies to cheaper products with fewer services covered.
“That could mean many older Australians losing cover for procedures such as joint replacements or mental health treatment,” PHA chief executive Dr Rachel David said.
The impact on regional communities could be severe. PHA has identified hospitals where more than 70 per cent of privately insured patients are aged over 65 – making them acutely vulnerable to any drop in insurance participation.
Among those at risk are hospitals in Queensland including Eden Private Hospital, Nambour Selangor Private Hospital, Hervey Bay Surgical Hospital and Noosa Hospital. In New South Wales, hospitals including Port Macquarie Private Hospital, Nowra Private Hospital, St Vincent’s Private Hospital Lismore and Forster Private Hospital are on the list. In Victoria, Beleura Private Hospital, Maryvale Private Hospital and Mildura Health Private Hospital have been flagged. Tasmania, with its older-than-average population, has also been identified as a state of particular concern.
“In many country towns and regional centres, the local private hospital is not a luxury – it is an essential part of the health system,” Dr David said.
“If activity drops significantly because older Australians can no longer afford their cover, some private hospitals will struggle to remain viable. That would mean fewer local healthcare options and more pressure on already stretched public hospitals.”
PHA’s concern is not just about hospital viability. Patients who can no longer access private treatment may join public hospital waiting lists – adding pressure to a public system already under strain in regional areas. In some communities, losing local private hospital capacity could force patients to travel hours for surgery, rehabilitation or specialist treatment.
“Once services are lost in regional Australia, they can be very difficult to restore,” Dr David said.
PHA is urging the government to carefully consider the unintended consequences of the changes before the federal budget is handed down.
The government has not yet responded publicly to the industry’s concerns.
If you hold private health insurance and are aged 65 or over, it is worth reviewing your current policy and understanding how your rebate may change from April next year. Contact your health fund directly to ask how the proposed changes will affect your specific cover and premiums.