SENATOR THE HON ANNE RUSTON

SHADOW MINISTER FOR HEALTH AND AGED CARE

DEPUTY LEADER OF THE OPPOSITION IN THE SENATE

SENATOR FOR SOUTH AUSTRALIA

MEDIA RELEASE

Wednesday, 26 August 2026

THE TRUTH IS NOW OUT ABOUT LABOR’S PRIVATE HEALTH CUTS TO 1.2 MILLION PENSIONERS

The Albanese Government has been forced to admit that its cut to the private health insurance rebate for older Australians will place financial pressure on around 1.2 million pensioners.

In a submission to the Senate inquiry examining the change, the Department of Health and Aged Care admitted it never bothered to work out how many pensioners held private cover before the policy was announced, only producing the 1.2 million estimate under pressure from stakeholders and the Coalition.

On its own admission, the Department still does not have a reliable, up-to-date count despite Health Minister Mark Bulter announcing the $11 billion tax grab in April.

Shadow Minister for Health and Aged Care, Senator Anne Ruston, said this was further evidence Labor's proposal had no policy rationale and was simply a lazy cost shift to the states.

“We will be fighting to block these callous cuts in the Senate. It is unconscionable that the Government designed an $11 billion tax grab without bothering to find out who it would hurt and only ran the numbers once stakeholders and the Coalition forced its hand,” Senator Ruston said.

“These are around 1.2 million pensioners – most of them full-rate pensioners with no capacity to absorb it – and the Government did not so much as count them before deciding to make their health insurance more expensive.”

The admission comes as a majority of states line up against the measure. South Australia’s Labor Government (Mark Butler’s home state) has joined the Labor Government of New South Wales and the Coalition Governments of Queensland and Tasmania in opposing the change.

“When Labor states and Coalition states alike – the governments that actually run our public hospitals – are all telling the Commonwealth this policy shifts cost, not care, the Government has run out of people to blame,” Senator Ruston said.

The country’s biggest private health insurer has also disputed the Government’s own modelling. Where the Government projects around 44,000 people would drop their cover, Medibank points to external modelling suggesting the figure could be more than double that at up to 91,000.

Medibank, HCF and Bupa have jointly warned the change will fall hardest on poorer retirees and older Australians in the regions, and that a shrinking pool will push premiums higher for everyone who remains. The Australian Medical Association says it is unconvinced the measure will deliver genuine net savings once the flow-on pressure to public hospitals is counted.

“It is predatory to design a policy that banks on older Australians being too frightened of losing access to care to walk away from their cover – that is not a genuine choice, it is entrapment,” Senator Ruston said.

“And it is the most vulnerable who are left to pay the price – retirees on fixed incomes and patients in the regions pushed towards a public system where waiting lists can already stretch for years.”

Senator Ruston said the rebate cut fit a now-familiar pattern from a Government that legislates first and works out the consequences later.

“This is the same Government that put an untested algorithm in charge of aged care assessments without consulting a single provider or older Australian and now it has designed a health tax for more than a million pensioners without even counting them first,” Senator Ruston said.

“It is a pattern of not doing the homework, and every single time it is older and more vulnerable Australians who are left to pay for the Government’s mistakes.”

Senator Ruston called on the Government to be honest with older Australians about the true impact of the cut, and to abandon a measure that a majority of states, the insurers and the medical profession all warn will leave patients worse off.

“The Government should scrap this cut and stop treating older Australians who did the right thing for decades as its next revenue source,” Senator Ruston said.

ENDS