There’s no doubt that our private health insurance system needs reform.

Insurers’ benefit payout ratios have drifted lower for years, eroding the value of private insurance to policy holders. Every year we pay more and get less.

Meanwhile, more than 500,000 high-earners have opted out of private cover altogether, while healthy young members subsidise a shrinking pool. We need to modernise the Medicare levy surcharge.

But the government isn’t tackling those challenges – instead, it’s asking retirees to pay more for their private insurance, ostensibly to cover the increasing cost of their aged-care packages.

This week the House of Representatives is due to debate legislation to strip away a higher rebate tier that has applied since the Howard era.

The rebate recognises the fact that older policyholders cost insurers more to cover. It acts as a subsidy to protect community rating — the principle that insurers can’t charge the old or sick more than the young and healthy — functioning as intended. Remove that correction and premiums for older members will effectively rise by hundreds of dollars a year.

The Albanese government wants Australians to believe that stripping the age-based private health insurance rebate from over-65s is a minor intergenerational equity fix. Health Minister Mark Butler has claimed........

© The New Daily