Mark Butler has put his plan to trim the private health insurance rebate for older Australians straight back before parliament, less than 24 hours after the Senate struck it off its agenda.
On Thursday morning the health minister reintroduced the Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026. The text is the same as the legislation the Coalition, Greens and Jacqui Lambie removed from the Senate notice paper by 38 votes to 23 on Wednesday. Butler had called that vote “an absolute travesty”.
He acknowledged the change “will not be a welcome decision for some” but called it “necessary and the right thing to do”.
“It will mean that two households living next door to each other on exactly the same income will receive the same support from government for their health insurance, regardless of age,” he said.
The bill would remove the age-based uplift from 1 April 2027. At the base income tier, the rebate for 65 to 69-year-olds would fall from 28.139% to 24.118%, and for those 70 and over from 32.158% to 24.118%, according to the health department. The government expects to save about $3 billion over four years for aged care.
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Opponents were unmoved. Lambie had already likened Butler’s response to Wednesday’s vote to “a two-year-old having a dummy spit”. On ABC News Breakfast she warned he would “get another slap” if he brought the bill back unchanged.
“Wake up, do the hard yards up here instead of doing easy targets like our elderly,” she told reporters on Thursday.
Liberal senator James Paterson said the move showed the government’s “contempt for the Senate” and called the bill “a particularly cruel cut”. Shadow health minister Anne Ruston had told Butler on Wednesday to “take the hint”, adding: “Drop it for good.”
The Greens remain the government’s only realistic path through the Senate. The party supports trimming rebates in principle but not at pensioners’ expense.
“You carve them out, protect the pensioners, and we will pass this legislation in a heartbeat,” Greens leader David Shoebridge said.
National Seniors Australia chief executive Chris Grice said almost a quarter of respondents to the group’s survey would need to dip into savings to keep their cover.
“There is significant uncertainty about the impact of the cut on private and public hospitals and on the health of our older Australians,” he said.
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The timing is awkward for insurers. Funds are expected to lodge their 2027 premium applications by mid-November, very likely before the Senate decides the bill’s fate. If the bill passes, older members would face the rebate cut and the annual premium rise on the same day, 1 April.
Private Healthcare Australia estimates that combination would cost someone aged 70 or over on Gold hospital cover about $807 a year. Butler puts the average extra cost at about $250.
Advisers can expect more older clients asking about downgrading. Moving from Gold to Silver can strip out joint replacements and cataract surgery. Clients can compare products on PrivateHealth.gov.au.
Read next: Thirty of 33 Senate submissions oppose the PHI rebate bill - and the vote is still too close to call
The Senate arithmetic hasn’t changed overnight. Unless Labor offers a pensioner carve-out, the second attempt looks set to meet the same fate as the first.
