Retiree angry over planned cuts to health insurance rebates

The South Australian government has warned cuts to health insurance rebates for older people could increase elective surgery waiting lists.

The federal government plans to scrap increased rebates on health insurance for people over 65, and invest the projected $3 billion in savings over four years into aged care.

Legislation to make the change is currently before parliament, but if it passes it will take effect in April next year.

It's something retiree Phil Joyce is angry about.

"When Gough Whitlam brought in Medibank and Medicare, I joined Medibank. As soon as the office opened, I joined Medibank," Mr Joyce said.

Mr Joyce has already reduced his extras, and downgraded his hospital cover to save money as the cost of living rises.

Now he is concerned he is going to be hundreds of dollars out of pocket each year.

"Consecutive governments in this country have known for 30 or 40 years, the baby boomers are coming to retirement. What have they done? Nothing. They've done nothing to set it aside," he said.

"I don't believe the Albanese government is doing a lot of things wrong but this is a black mark in my opinion. They're attacking the pensioner."

Federal health minister Mark Butler has previously said that under the changes Australians would receive the same level of support, based on income not age.

"What we have right now is that two households living next to each other on exactly the same household income will receive a different level of taxpayer subsidy, depending on whether they're over 65 or under 65," Mr Butler said.

"Every single dollar that we effectively save through that change will be invested in new aged care services that, frankly, we just have to start putting in place if older Australians are going to get the care and dignity that they deserve."

The South Australian government was so concerned about the changes it made a submission to the Legislation Committee, warning "the removed of age-based rebate tiers may have unintended consequences for access to care and place additional pressure on the public hospital system".

The letter, penned by SA Health chief executive Robyn Lawrence, said people may drop their insurance and even a 1 per cent increase would put pressure on elective surgery waitlists, outpatient assessment and diagnostics and rehabilitation care.

SA health minister Blair Boyer said the health system was "under pressure".

"We are not in a position to be having decisions made which are going to bring more pressure to bear on our emergency departments and I am concerned that could be the case here," he said.

But Mr Butler has previously said his government's modelling shows 0.4 per cent would drop their insurance, and he did not think there would be a "material impact on public hospital activity".

On Sunday, Mr Butler reiterated that federal government modelling indicated a "very, very modest impact".

"I'm very confident in the modelling that we have; that it will be a very, very modest impact both on insurance membership but on any flow-on through the rest of health system," he said.

Mr Boyer said around 226,000 South Australians — or 58 per cent — of over 65s had private health cover and he would be watching what happened to that number if the rebate was cut.

"The good news is because we know that data, we can watch very, very closely to see if that figure drops," he said.

"I've made it clear to the federal government, we're going to be watching. They've told us they're going to be watching as well."