Transcript
Station: 2GB
Program: Afternoons with Michael McLaren
Date: 24/4/2026
Time: 1:10 PM
Compere: Michael McLaren
Program: Afternoons with Michael McLaren
Date: 24/4/2026
Time: 1:10 PM
Compere: Michael McLaren
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia
| Michael McLaren | Now, it is expected around 3 million older Australians will have their rebate cut. And according to the government’s own forecasting, at least 44,000 people are expected just to ditch private health insurance altogether because of it. I mean, make no mistake, this is going to have flow on impacts across the private health system. Not just the economy, but the system itself, which is, as we know, already under strain. Rising costs, rising insurance and every other aspect associated with it. They need all the members they can get paying as much as they can rather than the other way around. Well, someone who understands this is Dr. Rachel David. Now we’ve spoken before, Dr. David is the CEO of the Private Healthcare Australia, peak industry body of course, and Dr. David’s with me. Rachel, thank you for your time. |
| Rachel David | Hi Michael. |
| Michael McLaren | Okay, firstly, was this flagged at all with your members that this was something the government was considering? |
| Rachel David | No, we found out about it at roughly the same time that everyone else did during Minister’s Press Club address, predominantly on the NDIS. But then this issue of transferring millions of dollars from older Australians into aged care came up. And that is the issue about reducing the government’s premium assistance to older Australians. So what that means in practice is that people aged 65 to 69 from next year are going to have an extra premium increase of 5%, which will be about $250 for a standard policy. But people aged over 70, it’s going to go up to 11% extra premium, which could be anything from $500 to $700 extra. And in a cost of living crisis where you’ve got people on low annuities, 400,000 aged pensioners have private health insurance. That’s really got to hurt in the hip pocket and it will cause some people to drop out. But my fear is it’s going to cause far more people to downgrade their health insurance. |
| Michael McLaren | That’s right. |
| Rachel David | Just at the time that they’re likely to need things like joint replacements or treatments for heart conditions or back pain surgery. |
| Michael McLaren | Well, this is it. I think Tony Abbott was the Health Minister under John Howard, the Prime Minister, when this was brought in. It’s been around therefore for the better part of 20 years or thereabouts. But, you know, the Liberal government, the previous Liberal government, I think, did a study into this, they had some external party look at potentially doing exactly what Labor have done. And the result was, well, look, in the short term, it’s actually going to cost the budget. So, and they decided against it. Now, I mean, I don’t know if this current government’s got some different advice or different modelling. I mean, modelling’s only as good as the numbers you put into it, of course, but I can’t see too many upsides here. |
| Rachel David | Well, what it’s going to do is it’s going to shift the costs to another level of government. So basically, when people in that age group, we know people in this age group need hospital care, we’ve got very good data on that. If you’re between 50 and 70, that’s the peak time to have joint replacements. If you’re in the 70s and 80s, that’s the peak time to have things like heart valves replaced and so forth. So we know this group is going to seek hospital care. We know they’re going to struggle with the extra premium that they’re now going to have to pay. So if they drop out or downgrade they end up on either a public hospital waiting list or in a public hospital emergency department, both of which are managed by state government not the federal government. |
| Michael McLaren | Yes and of course both of which for a lot of these types of surgery and medical intervention that you’ve highlighted Rachel already have very extensive wait lists in the public sector. It’s more expedient in the private sector to often choose your own surgeon so on and so forth but you know, what this will do is further load the public sector, therefore blow out the wait times, won’t it? |
| Rachel David | Yes, absolutely well particularly as this is a demographic cohort who we know for a fact is going to claim. They are going to either use their health insurance to have one of these procedures or they’re going to turn up on a waiting list. So by removing this additional incentive, what it’s essentially doing is saying to state governments, you’re going to have to pick up the cost of managing these people. |
| Michael McLaren | A bit of that going on with the NDIS though as well. I know that’s not your bag per se, but it’s a similar story, is it not? Get all the mildly autistic kids off the federal scheme, put them over in this Thriving Kids thing over here, administered and largely paid for by the states, and then Canberra says, Oh, look at our balance sheet, aren’t we doing well? We’ve got all of these forecast expenses way down, we’re going to deliver a surplus. It’s the same taxpayer paying Canberra as it is paying Macquarie Street or Spring Street or whatever at the state level, right? |
| Rachel David | Oh, absolutely. And this churning around of money does nothing to help the taxpayer who’s at the end of it and other people that are actually supporting Australia for having three whole tiers of government which seem to indulge in this kind of gaming far too often. |
| Michael McLaren | Okay, so that’s the impact on the economy and on the individual. What about the impact on your members? Because, as I said, you know, a lot of Australians still have some form of private health insurance, but obviously the sector would like to see more Australians have it rather than fewer. And the higher the category of cover, I would assume, the better. Let’s say a lot of these people start to either downgrade or walk away. What impact does that have on the insurance industry? |
| Rachel David | Well, the impact on our industry, which has been growing, it’s been growing in line with population growth for some time, will be, no one wants to see people drop out and it basically means that the people that are left hanging on to top hospital cover or gold hospital cover are going to be paying more as the only people that will be left in that tier are people who intend to claim, so it will mean that prices in that tier increase more than they otherwise would have. |
| Michael McLaren | Are we going to see a campaign from the industry to try to reverse this? I mean, it’s not legislation yet, so are you going to try to nip it in the bud before it happens? |
| Rachel David | Well look, we are going to make our views very acutely known in Canberra and we’re going to discuss an alternative proposal which is to make sure that people on very low incomes, particularly the 400,000 aged pensioners with private health insurance, are made exempt from this measure |
| Michael McLaren | Alright, we’ll watch that as it unfolds. Thanks Rachel, I appreciate your time. |
| Rachel David | Thank you very much. |
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