The federal government’s decision to make private health insurance more expensive for older Australians is bad policy.

At a time when our public hospital system and aged care sector are already under immense strain, increasing costs for Australians over-65s risks pushing more people out of private cover altogether. The government itself reportedly expects tens of thousands of older Australians to drop their insurance as a result.

More than any group, retirees and pensioners often live on fixed incomes that are vulnerable to price shocks. They are already facing rising healthcare, housing and energy costs. For many, even a few hundred dollars extra per year can make a real difference. As reported by ABC News (Older Australians concerned about Labor’s plan to reduce private health insurance rebates), the difference could mean the choice between eating, heating or receiving healthcare.

This policy also feels strategically short-sighted. If fewer older Australians maintain private cover, demand will inevitably shift back onto the public system, increasing pressure on hospital waiting lists and emergency departments that are already struggling. This will compound pressure on the public system, leading to poorer outcomes for everyone who uses it, not just older people. People may be less likely to get medical attention early on, risking exacerbating health problems. This is bad for the patient and bad for the public purse.

Intergenerational equity matters. But fairness should not come at the expense of access to healthcare for older Australians who have paid taxes, contributed to society, and planned their retirement based on long-standing policy settings. The policy feels like a Canberra thought-bubble that should have been popped before it made the Budget papers.

By all means let’s find workable solutions to the long-term funding challenges facing our health and aged care services. But let’s do it in a way that strengthens confidence in Australia’s healthcare system, rather than creating new barriers to care for those most likely to need it.