Senate throws out budget plan to remove health insurance top up for older people

The Senate has rejected the government’s controversial budget measure to remove the higher private health insurance rebate for people 65 and older.

The opposition, Greens and crossbenchers on Wednesday passed a motion to ditch the bill from the Senate agenda.

At present older people with private health insurance receive higher rebates than the younger population. There are two tiers for those 65 and over, with the highest concession going to those aged 70 and over. The government’s change would remove all age distinctions.

The saving would be worth some $3 billion over four years to the budget. The government said the money would be redirected into aged care.

The measure has received wide criticism with predictions many low income people would not be able to afford to continue their private insurance.

After the vote, Health Minister Mark Butler said the government would try on Thursday to bring the legislation back. He said the government was willing to discuss changes.

The Greens are concerned about the hit to pensioners.

New Greens leader David Shorbridge said

The Greens will support this Bill to reduce Private Health Insurance rebates with a simple clear amendment, protecting pensioners.

It is plain offensive to see Labor looking for over a billion dollars in savings from cutting rebates to pensioners when they refuse to even consider taxing record gas export profits.

We have a simple message for Labor today, tax gas multinationals not pensioners, then you will get Greens support.

Butler said that pensioners made up some 1.2 million of the about three million people who would be affected by the measure.

The motion in the Senate was co-sponsored by Tasmanian crossbencher Jacqui Lambie and the shadow minister for health and aged care, Anne Ruston.

Butler told a news conference:

This afternoon we saw the resurrection of the No-alation under the new leadership of David Shoebridge, a partnership that is determined to thwart the agenda of the government without debate, without consideration of amendments, simply by a political stunt to discharge a bill that is intended to fund more aged care beds, more aged care packages, and better care for older Australians.

Butler said the government had been willing to “consider those amendments in good faith in the chamber, but we didn’t have the opportunity to do that”.

“We’ve been having discussions with the Greens. It appears pretty clear that the new leadership of the Greens Party was not willing to have those negotiations continue.”

Ruston said Wednesday’s result “is a win for every pensioner who has paid their premiums for decades and was about to be punished for it.

"Mark Butler should take the hint. Don’t try to sneak this cut back onto the agenda. Drop it for good.”

The Coalition said documents released under Freedom of Information showed the Health Department expected 78,000 older people to drop their cover by 2029-30. This was nearly double the 44,000 figure Butler had used publicly. “The Department’s own figures show a single person over 70 on Gold cover would have paid around $400 more a year,” the opposition said.

Lambie said: “You do not balance the budget on the back of pensioners”.