{"id":79319,"date":"2026-08-24T16:04:43","date_gmt":"2026-08-24T16:04:43","guid":{"rendered":"https:\/\/www.europesays.com\/australia\/79319\/"},"modified":"2026-08-24T16:04:43","modified_gmt":"2026-08-24T16:04:43","slug":"south-australia-labor-comes-out-against-federal-labors-over-65s-private-health-insurance-shift","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/australia\/79319\/","title":{"rendered":"South Australia Labor comes out against federal Labor\u2019s over-65s private health insurance shift"},"content":{"rendered":"

Health Minister Mark Butler\u2019s home state has come out in opposition to his controversial overhaul of private health insurance, as the industry says the changes will force 200,000 people aged over 65 to downgrade their cover and 62,000 to drop out entirely. <\/p>\n

South Australia\u2019s Labor government now joins the NSW Labor government and the Tasmanian and Queensland Coalition governments in publicly lashing<\/a> federal Labor\u2019s move to scrap the larger private health insurance rebate for those over 65.<\/p>\n

The criticism comes from the department overseen by Mr Butler\u2019s home state factional ally, SA Health Minister Blair Boyer, seen as a leading Left faction figure in the SA parliament and a potential future leader. <\/p>\n

Mr Butler has said the policy move \u2013 to remove the higher rebate rate over-65s<\/a> received for private healthcare \u2013 was a \u201chard decision\u201d but that it was necessary to free up more money to put into aged care. <\/p>\n

The SA health department told a federal Senate inquiry the federal policy relies on a \u201csimplistic measure\u201d and does not \u201cadequately consider\u201d whether public hospitals can take on more demand. <\/p>\n

\u201cWhile the fiscal objectives underpinning the reform are acknowledged, the removal of age-based rebate tiers may have unintended consequences for access to care and place additional pressure on the public hospital system,\u201d department chief executive Robyn Lawrence wrote in a submission to a Senate inquiry. <\/p>\n

The federal government\u2019s regulatory impact statement relies on an \u201cassumption increased demand is easily absorbed based on the simplistic measure of additional separations as a proportion of total projected public hospital admissions and does not adequately consider whether the relevant public hospital services have the capacity to absorb this additional demand\u201d. <\/p>\n

\u201cA 1 per cent increase across public hospital admissions could have a material impact if additional demand is concentrated in particular specialties, hospitals, regions, or procedures already experiencing capacity constraints,\u201d Dr Lawrence wrote. <\/p>\n

This shift from the private system to the public one would \u201cmaterially impact\u201d capacity and would risk longer elective surgery waitlists, increased demand for outpatient assessment, pressure on pre-admission and perioperative services, and additional demand for rehabilitation and post-acute care, she said. <\/p>\n

The federal government should consult further with states and territories, and consider transitional or targeted mitigation measures to reduce the impact, she said. <\/p>\n

Contacted for comment, Mr Boyer declined to add to the submission. <\/p>\n

Contacted for comment, Mr Butler\u2019s office maintained the effects to the system would be small. <\/p>\n

\u201cUnder the proposed changes, all Australians will now receive the same private health support, based on their income, not age.\u201d a government spokesman said. <\/p>\n

\u201cUnder the proposed changes, over-65s will still receive significant government-subsidised discounts of up to 24 per cent on the premiums private health insurers charge them, the same as the rest of the population.<\/p>\n

\u201cWhile some people may choose to leave private health insurance because of this change, we project this would be around 0.4 per cent.<\/p>\n

\u201cDespite this change, the overall number of people with private health insurance is expected to continue to increase, including in people aged over 65.<\/p>\n

\u201cLabor is investing over $3bn in delivering more aged-care beds, more packages and better care for older Australians through the 2026-27 budget.\u201d<\/p>\n

The private health insurance industry peak body produced modelling that questioned the government\u2019s claim that this would see 44,313 drop out of insurance. <\/p>\n

\u201cPHA estimates 62,000 people dropping their cover, which is significantly higher than the government\u2019s estimate of 44,000 on a base of over three million people,\u201d Private Healthcare Australia wrote in its submission. <\/p>\n

\u201cHowever, these numbers alone provide a misleading picture of the full effects on lower-income Australians and our health system.<\/p>\n

\u201cPHA modelling suggests that around 200,000 people will downgrade their health cover, predominantly dropping from gold to an insurance product with exclusions. <\/p>\n

\u201cThis will put pressure on the rest of the system, but also increases the risk of consumers not being covered for services they need.\u201d<\/p>\n

The measure would amount to a \u201cmassive cost shift of $3bn from the Australian government to older Australians\u201d, it said. <\/p>\n

And as a result, states and territories will be liable for \u201calmost $260m per annum additional expenditure\u201d, it claimed.<\/p>\n

\"Noah<\/a><\/p>\n

Noah Yim is a reporter at The Australian’s Canberra press gallery bureau. He previously worked out of the newspaper’s Sydney newsroom. He joined The Australian following News Corp’s 2022 cadetship program.<\/p>\n","protected":false},"excerpt":{"rendered":"Health Minister Mark Butler\u2019s home state has come out in opposition to his controversial overhaul of private 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