Private health changes appear all but doomed as Greens play hardball

The federal government's controversial private health insurance changes appear all but doomed after the Greens sent the strongest signal yet that they would not back the legislation in its current form.

The development comes as the ABC obtains figures prepared by the health department revealing that more than two million Australians affected by the changes live on less than $37,000 a year.

The proposal would wind back the rebate Australians aged 65 and over receive on their private health cover, banking about $3 billion to spend elsewhere in the aged care system.

Last month the ABC revealed that about $1.6 billion of those forecast savings would be clawed back from pensioners, according to Parliamentary Budget Office (PBO) analysis, prompting widespread criticism from the Coalition and crossbench.

A parliamentary inquiry examining the impact of the changes on older Australians and the broader health system has now released its report, with the Labor-dominated inquiry recommending the legislation pass parliament.

But the Coalition and the Greens issued dissenting reports, warning the proposed changes could leave older Australians facing higher costs while placing further pressure on an overstretched public health care system.

With the Coalition already vowing to block the legislation in the Senate, the federal government must get the Greens on board for the bill to pass.

But Greens health spokesman Jordon Steele-John said the party had "serious concerns" about the legislation in its current form.

"People are doing it tough right now, and too many people are already putting off seeing a doctor because they just can't afford it. We've got ambulance ramping still going on and our hospitals are stretched to the limit," he said.

"State and federal governments should be putting more money into healthcare, not making it harder for people to get the care they need."

The ABC understands the Greens are canvassing different options to amend the legislation, such as looking to exempt pensioners from the changes.

New figures provided in response to a question on notice from Shadow Health Minister Anne Ruston have shown that of the more than 3.2 million older Australians affected by the changes, about two million live on less than $37,000 a year.

"Older Australians keep private health insurance not simply because they prefer it, but because they cannot afford to be without it," she said.

Insured persons (non-dependents, aged 18+ years), grouped by age and income (all sources) for 2028-29, under 2026-27 Budget PHI Rebate measure effective 1 April 2027 Source: Health Department.

Government counting on $3b saving

The federal government is counting on the $3 billion in expected savings from the changes, having already promised to funnel the money into other major aged care commitments, including a plan to build an extra 5,000 aged care beds a year by 2029.

But the proposal has come under increasing scrutiny, with the health insurance sector, aged care advocates, the Coalition and the states and territories all raising concerns about whether the move would pile pressure on both older Australians and the public health system.

The government has repeatedly defended the changes, pointing to its modelling that suggests about 44,000 Australians would dump their private health insurance as a result of the change. The figures are backed by independent modelling from health economists.

Other experts have also publicly supported the proposal, with former health department boss Stephen Duckett saying the impact on the system would be "trivial".

In the parliamentary inquiry's report, the Labor-dominated committee encouraged the health department to monitor the impact of the changes, and said the $3 billion in savings would "contribute to addressing delayed discharge from hospitals and ultimately relieve pressure on the public hospital system".

"The committee acknowledges that many submitters are worried about the financial impacts this reform may have on them. The committee is reassured that the rebate will remain means tested. Older Australians on low income will receive a higher rebate, on par with younger Australians," the report said.