Dr Rachel David spoke with ABC radio about the Government’s plan to reduce the higher health insurance rebate for pensioners aged 65 plus

14 Sep 2026Interviews and Transcripts

Transcript

Station: ABC Radio Adelaide
Program: Adelaide Breakfast with Jules Schiller and Sonja Feldhoff
Date: 14/9/2026
Time: 8:53 AM
Compere: Jules Schiller / Sonja Feldhoff

Interviewee: Dr Rachel David, CEO, Private Healthcare Australia

Jules Schiller	Dr. Rachel David is CEO of Private Healthcare Australia. Good morning to you, Rachel. Do you think it could cost that much, and how much does your modeling tell you that people will drop out of private health because of these changes?
Rachel David	Well, look, this is just independent confirmation of what we’ve been warning the government about with this measure all along, in that it is actually going to hit some of the poorest people with private health insurance. We estimate that there are 1.32 million people with private health insurance who are on an age detention, and we think that they can ill afford the extra hundreds of dollars that this policy is going to mean they’re going to have to find from April next year.
Jules Schiller	Should it be means tested? Would that make it fairer?
Rachel David	Look, it is means tested already, but that hasn’t stopped the government going after a group of people that contain a large number of aged pensioners to make this change. We think that’s the wrong decision. We understand that there’s a need to make savings, but there needs to be in a much equitable way, so that people on higher incomes maybe have to give it a bit more rather than age pensioners.
Sonja Feldhoff	Rachel David, with that in mind, what would you like to see happen there?
Rachel David	Look, I think we need to leave the private health insurance rebate alone. It’s already been means tested. There are other ways in which, if you want to keep the lid on premiums and save money in private health insurance, that you can do that. One is by reducing some of the extraordinary amounts of money that Australians pay for medical devices and surgical supplies here in Australia. That’s something that we’ve campaigned on for many years about why, in our hospitals we have to pay some of the highest rates in the world for some of these things, and the other thing too is some of the levers that the government has in the tax system. So the Medicare levy surcharge is a tax that people pay if they’re on a high income and they don’t have private health insurance. And one option for the government is actually to increase that, so that people that are choosing to opt out of the system, and if they if they are reasonably wealthy, then they can get to pay their fair share.
Jules Schiller	Rachel, the government will say that this change was brought in to make it more equitable between generations. Why should older Australians have cheaper private health than younger Australians? What would you say back to the government when they prosecute that argument?
Rachel David	Well, these are people that have often been with private health insurance for decades, and they’ve just hit the age when they’re going to need it. So, people in this age group claim more than they pay premiums, which means they’re absolutely going to need the their insurance. And so, hitting them with this when they’ve had the expectation that it would cost a certain amount, we think is pretty unfair. We estimate that about 62,000 people will drop out completely. But what is really worrying us is people that will downgrade from top hospital cover, so that they’ll be on a product that won’t necessarily cover them if they need to go into hospital.
Jules Schiller	1.6 billion is what the federal government says it will be saving by this measure. If these people are now going to public hospitals instead and using their and adding to that burden, is there any modeling to suggest what it will cost our public hospital system? I guess my question is: Is this a false economy?
Rachel David	Yeah. Look, I think it is. Our modeling shows that in the first year, the public hospitals are going to have to find 260 million extra dollars, and because these people need to go somewhere, as I mentioned before, this is a this is a particular age group where they claim more than they actually spend in premiums, which means that from aged about 60, people start to use the hospital system much more heavily, and so that burden will ultimately fall on the public hospital system.
Sonja Feldhoff	Rachel David, what about the arguments that the health minister, federal health minister Mark Butler, has made regarding aged care and there a need to redirect funding towards aged care from this rebate?
Rachel David	Well, we’re trusting that the amount of money is being redirected to aged care and not going into general revenue for a start. But this is a classic case of robbing Peter to pay Paul. Why would you take money from one group of people on low incomes who are pensioners and spend it on another similar group of people. It’s just not getting the budget anywhere.
Jules Schiller	You’re listening to Dr. Rachel David, CEO of Private Healthcare Australia, we’re talking about the changes coming to the private health rebate. Discounts will be taken away from older Australians. I’m sure if you’re an older listener, you would be well aware of this and probably not too happy about it. Rachel, the government, their modeling says 44,000 Australians would dump private health as a result of these changes. What does your modeling tell you about how many people might downgrade the standard of their private health?
Rachel David	Look, we think it’s in the order of 200,000 who are currently on top hospital cover who are likely to downgrade because of the changes.
Jules Schiller	So, do you think 44,000 is the government being in the acute about this advice?
Rachel David	People is in the ballpark, but it’s probably quite a significant underestimate of the number of people that will drop out. In addition to that, they haven’t modeled downgrades, and it’s people that downgrade their insurance to products that cover them for less surgery that is a real worry here, and we’re estimating that that’s 200,000 people in the first year.
Jules Schiller	And finally, we know Dr. Monique Ryan, who’s a crossbench MP, she’s advocating for pensioners to be carved out of these changes. Do you have any hope that the federal government will be listening?
Rachel David	Look, I really think that the federal government needs to pay close attention to this debate, and not just simply say that this is money that we’ve been taken away from wealthy people because of their age. There are a lot of people who are living with considerable disadvantage who are paying for private health insurance, and unfortunately, this measure targets them.
Jules Schiller	All right, thank you, Dr. Rachel David, their CEO of Private Healthcare Australia.
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