By Greg Morris, CEO HIF
The post-budget conversation is largely focusing on the fallout and implications of changes to negative gearing and capital gains tax.
But it’s imperative that the federal government’s proposed changes to the private health insurance rebate for over‑65s do not slip off the news agenda. These changes are likely to disproportionately impact Australians who have contributed to the economy for longer than any generation that followed. When they were younger, they subsidised the health system. Now, when they need it most, they are being told the rules have changed – and they should pick up the bill.
Under the policy, more than 3 million Australians aged 65 and over will have to pay hundreds of dollars more a year for their health insurance, with the government’s own modelling showing up to 44,000 people could be forced to drop their health insurance because of the change.
The government has framed this issue almost exclusively through the lens of generational equity. That framing is incomplete because it excludes discussions about repaying a generational debt that is owed to these older Australians, and what is morally right.
When these generations were raising families and building the nation, there was no NDIS. There were fewer safety nets, fewer supports and fewer public services. They carried more responsibility themselves, personally and financially. To examine today’s policy settings without recognising that contribution, and without acknowledging the debt we owe them, is short-sighted.
This generation has now entered a time of life when they simply can’t adapt by earning more. For many retirees, work is no longer an option. Many planned responsibly and conservatively, based on reasonable expectations about what would be available to them in retirement. Those expectations are now being removed after the fact.
There is also a troubling equity issue in the way the reforms treat people who did everything they were encouraged to do. They worked hard, paid taxes, saved through superannuation and remained largely self-sufficient. These Australians now find themselves pushed into higher income thresholds in retirement, not because they are wealthy, but because they planned carefully – now they’re being penalised.
Where is the fairness in that?
Older Australians are the people most likely to require hospital care. Waiting lists matter more when time is limited as we grow older. Choice matters more when health is fragile. To remove access to private cover so late in life, after decades of contribution, is not just economically questionable. It is morally wrong.
I understand why commentary has focused on protecting older Australians on the very lowest incomes. But this policy risks unfairness well beyond that group. People who did “everything right” are also being hit with costs they could never reasonably have anticipated. It is perverse that those who saved more and placed less strain on the system are treated less favourably. Beyond the immediate financial pressure, the policy will also restrict choice by limiting access to preferred healthcare providers, treatment facilities, and timely care. These are precisely the outcomes people reasonably expect after investing in decades of private health insurance.
The consequences of this reform extend well beyond individual households. If older Australians are priced out of private health cover, the pressure on our already stretched public health system will increase. It undermines the ability of private health insurers to play their critical role in easing demand on public hospitals, lengthening waiting lists and reducing choice for patients. And this impacts all generations.
If we truly believe in fairness across incomes and across our health system, then reform must recognise not only who needs protection now, but who has already paid their share many times over. The issue, fundamentally, is fairness. And on that measure, this policy falls short.
First Published in WA Business News on 1 June 2026
Listen the conversation with our CEO, Greg Morris, interviewed on radio for his perspective on the proposed rebate.
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