Dr Rachel David spoke with ABC Radio Drive about the impact of proposed private health insurance rebate changes on older Australians

12 Oct 2026Interviews and Transcripts

Transcript

Station: ABC Radio
Program: Drive
Date: 12/10/2026
Time: 4:11 PM
Compere: Jessica Naunton

Interviewee: Dr Rachel David, CEO, Private Healthcare Australia

Jessica Naunton	For decades, Australians have been encouraged to take out private health insurance, pay their premiums and plan for the day they might need it most. But for older Australians, particularly pensioners living on fixed incomes, keeping that cover could soon become even more expensive. The federal government wants to remove the additional private health insurance rebates for people aged over 65, with the savings redirected to aged care. Private Healthcare Australia warns that around 1.5 million age pensioners could be affected and fears some older Australians will have little choice but to downgrade or abandon their cover altogether. So, could a reform designed to strengthen one part of our health system end up putting more pressure on another? And what happens to patients caught in the middle? Dr Rachel David is the CEO of Private Healthcare Australia and joins me on Drive this afternoon. Good afternoon, Dr David.
Rachel David	Hi, Jess.
Jessica Naunton	Now, the federal government wants to remove the higher private health insurance rebates for Australians over 65. In practical terms, though, Dr David, how much more could an older person or pensioner end up paying each year?
Rachel David	Well, it’s going to be a couple of hundred dollars for people aged between 65 and 69, but it shoots up to more than $1,000 for people aged over 70, particularly if they have top hospital cover. So this is not nothing for someone on a fixed income. It really does need to be taken into account.
Jessica Naunton	How concerned are you that people who have maintained their private health insurance for decades may now decide they simply can’t afford it anymore?
Rachel David	Well, we’re very concerned because, of course, this is occurring in the middle of a cost-of-living crisis, when everything has been going up, including the cost of power and food. People are having to make tough decisions about their health. It’s not just people dropping out of health insurance, either. Some may choose to downgrade to a lower level of cover that might not cover the treatment they need, meaning they may have to go to a public hospital.
Jessica Naunton	The industry estimates that around 62,000 older Australians could drop their cover and another 200,000 could downgrade. What’s driving those projections, and how do they compare with the government’s modelling?
Rachel David	Well, look, our modelling is based on recent market research in which we asked people what they were willing to pay. So we’re pretty confident in our numbers, particularly around downgrading, which is the real hidden concern here. These are people who currently have top hospital cover and may be persuaded to move to a cheaper form of cover that does not include everything they might need. They are the people we’re concerned could end up in a public hospital.
Jessica Naunton	On ABC Radio across regional Queensland this afternoon, my guest is Dr Rachel David, CEO of Private Healthcare Australia. We’re talking about the federal government’s proposed health insurance changes. Dr David, access to specialists and private hospitals can already be limited in regional Queensland. What would a significant shift away from private health insurance mean for patients and healthcare services outside the capital cities?
Rachel David	Well, I think the first thing is that public hospitals are going to need to spend more on patients who have dropped out. It doesn’t matter whether they’re in the regions or in a capital city. We suspect that, in the first year, an extra $260 million will need to be found for public hospitals to make up for this change. The other issue, particularly for some regional private hospitals, is that they rely very heavily on full occupancy. As people drop out, those hospitals may not remain viable if they are unable to keep their beds occupied over time.
Jessica Naunton	The government argues that the changes will make rebates fairer across age groups and redirect billions of dollars to aged care. Isn’t that a worthwhile goal, and why does your industry believe this is the wrong way to achieve it?
Rachel David	Well, look, of course funding aged care is a worthwhile goal, but it needs to be considered in a way that doesn’t rob Peter to pay Paul. Taking funding from one group of older people and giving it to another is not the way to go about this. We’re happy to work constructively with the federal government on alternatives, but raising an issue like this without appropriate consultation is simply not appropriate.
Jessica Naunton	Has that been the concern? Have you received much of a response when you’ve raised this with the federal government at Parliament House?
Rachel David	Look, it took us months to find out how many pensioners were going to be affected by the policy. I know it hasn’t been easy, but we’ve been building up a picture of just what this is going to mean for people with private health insurance.
Jessica Naunton	Dr David, at what point is there a responsibility for health insurers themselves to make cover more affordable, particularly for people aged over 65?
Rachel David	Health funds are doing everything they can in an inflationary environment to keep premiums down, but we need to be aware that inflation is also affecting the private health sector, particularly the cost of wages, power and food for private hospitals. We have to be able to cover what private hospitals need to deliver care, and that’s where most premium funding is going.
Jessica Naunton	What changes would you like to see before Parliament makes a final decision?
Rachel David	Well, at the very least, I think we need to look at the number of pensioners who are affected and whether a better approach can be designed to ensure they’re protected from this measure. Ideally, we’d like to see this measure withdrawn and a new approach developed to help fund aged care. But at the very least, we need to consider people on very low fixed incomes and pensions to make sure they’re not affected.
Jessica Naunton	If anyone listening right now is over 65 and feeling nervous or worried, Dr David, what advice do you have for them?
Rachel David	We’re providing regular updates on our website, pha.gov.au. People can also follow the news, as this has been widely discussed in the media. Many people are appalled by the suddenness of the decision and the lack of consultation. There is a lot of information available, but our website is a good place to start.
Jessica Naunton	Dr Rachel David, CEO of Private Healthcare Australia. It seems this issue isn’t going away anytime soon, but we really appreciate your time this afternoon.
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