The Australian Society of Ophthalmologists (ASO) fears many older Australians will “downgrade or drop their cover entirely” after the federal government’s changes to health insurance announced in the Federal Budget.
The government is cutting private health insurance (PHI) rebates for over three million Australians aged 65 and over, which is expected to save $3 billion over four years.
It says it is doing this to align those rebates with younger age groups.
Effective April 2027, the changes will increase annual premiums for seniors, with rebates for those 65-69 dropping to 24% (from 28%) and for 70+ to 24% (from 32%).
This comes on the back of recent rises in insurance premiums averaging 4.41% – the largest increase since 2017.
ASO CEO Katrina Ronne said that and the Budget move would place significant burden on many households.
“The combined effect is hundreds of dollars more per year for senior households, many of whom are on fixed incomes,” she said.
“That doesn’t save money and instead shifts costs onto an already stretched public system, resulting in longer waits for patients with progressive, time-sensitive conditions.”
Older Australians were the cohort most likely to need surgical eyecare, she said.
That included cataract surgery, the most commonly performed surgical procedure in the country.
The vast majority of patients requiring it were over 65, said Ronne.
“Any policy that makes it harder for these Australians to maintain adequate private health cover directly undermines their ability to access timely treatment.”
She said a decision of this magnitude warranted genuine consultation with the medical specialists who deliver that care, but the ASO was not consulted.
“We have long advocated for greater accountability and transparency from private health insurers, and we will continue to do so, but this is not the reform we called for.
“You cannot improve the system by making patients pay more for less.”
She said the ASO supported sensible reforms to private healthcare legislation, including advocating for mandated private health insurer “benefit-payout” ratios to ensure a fairer return on premiums.
Private Healthcare Australia (PHA) has also come out in opposition to the change.
In a media release, the peak body for health insurers called on the government to exempt Australians aged over 65 on low incomes – including those on the Age Pension – from the changes.
Like the ASO, it feared they would lead to vulnerable people dropping their cover.
“About 39% of Australians with private health insurance earn less than $55,000 a year. This includes more than 900,000 older Australians who will be affected by the government’s proposed changes announced yesterday as part of its aged care cost-of-living measures,” PHA CEO Dr Rachel David said.
“Many of these people have annual incomes under $30,000 and many of them are in rural and regional Australia.
“While we recognise the government’s equity rationale for aligning rebate rates for those over and under 65, the reality is this broad-brush approach will make private health insurance unaffordable for thousands of vulnerable Australians.”
Dr David said those most affected would have higher healthcare needs.
“There is a large cohort of older Australians with chronic conditions who rely on the private system and already devote a significant share of their limited incomes to their healthcare,” she said.
“The public hospital system is already under pressure and cannot provide timely care for many of these patients. That’s precisely why they rely on private health cover to manage their health.”
She said the PHA had supported reducing rebates for higher-income retirees and put that into its own submission to the Budget.
“It would protect low-income Australians from premium shocks and avoid shifting additional costs onto the public hospital system.”
She said this would have supported the government’s objective of improving intergenerational equity.
