New modelling showing almost half of the $3 billion cut to the private health insurance rebate will come directly from pensioners should prompt an urgent rethink of the Federal Government’s plans, COTA Australia says.
COTA Australia Chief Executive Officer Patricia Sparrow said Parliamentary Budget Office modelling released this week makes the impact on age pensioners increasingly clear.
The newly released PBO modelling now estimates that around 1.5 million aged pensioners would be impacted by the changes due to come into effect from April next year. Aged pensioners make up 42% of those affected by the changes – increasing to more than half (52%) of the over 70 cohort.
“The more we learn about these proposed changes, the more concerning they become – especially for people on fixed and low incomes,” Ms Sparrow said.
“This policy proposal needs a complete rethink.”
Ms Sparrow said older Australians and their families are not just worried about what the change could mean for them personally, but for the public health system as a whole.
“COTA Australia’s State of the Older Nation report found that one in four older people are living in poverty, yet we now know pensioners are expected to shoulder almost half the savings from this policy.
“Many older Australians are already questioning whether they can continue to afford private health insurance. Making it more expensive risks pushing more people to downgrade their cover or leave the system altogether.”
Ms Sparrow said COTA Australia’s research found 82 per cent of Australians opposed removing the higher rebate for people aged over 65, while more than one in three said they would consider downgrading or cancelling their cover if the changes went ahead.
“Those findings should already have prompted serious consideration of the impact of these changes. The latest modelling makes the need for a rethink even stronger.”
In its submission to the Government, COTA Australia warned removing the higher rebate is likely to increase out-of-pocket costs for many older Australians, undermining the affordability of private health insurance.
“If these changes lead to people dropping or downgrading their cover, the consequences won’t just be felt by those individuals. There is a real risk of adding further pressure to an already stretched public hospital system.
“We are supportive of the work government is undertaking more broadly on private health insurance and its role in Australia’s healthcare system, but we are concerned that the rebate changes would disproportionately hit those older Australians who can least afford to accommodate the change after years of working to maintain their private health insurance.”
Media contact: Tamara Kotoyan, 0430 291 890 or Alana Mew, 0419 929 722