Older Australians weigh cost of changes to health insurance rebates

The federal government has proposed reducing private health insurance rebates for Australians aged over 65.

Insurance industry estimates say 62,000 older Australians may end their insurance and 200,000 may downgrade as a result of the change.

A Senate Community Affairs Legislation Committee's inquiry into the bill will be presented on October 7.

For most of her life, Sue Donnelly has paid for private health insurance.

But now, with price increases on the way, she and her husband are considering ending their cover.

"We're 78 and 81; we really need to have it," Ms Donnelly said from her home in regional Victoria.

The federal government this year proposed legislation to reduce the private health insurance rebate that currently applies to over-65s.

The change would mean rebates would be "age-neutral" and determined by income alone, leaving impacted premiums with an increase of between 4 and 8 per cent.

Ms Donnelly said she didn't have a lot of incoming funds and was worried about how the change would impact them.

"It's money I have to really make sure I put to one side every month," she said.

Estimates from Private Healthcare Australia show 62,000 older Australians would likely cease their private health insurance as a result of the proposed changes, with another 200,000 potentially downgrading theirs.

The Shadow Regional Health Minister and Member for Mallee, Anne Webster, said she was worried about how the public health system would cope if a large cohort of older Australians suddenly shifted away from private health insurance.

"When private services disappear, patients do not. They are pushed into the public system," she said.

Dr Webster said the Mildura Base Public Hospital, located in her electorate of Mallee, already has "enormous wait times" and concerns around staffing , which she said could worsen under the change.