Under current arrangements, people aged 65 and over receive a larger private health insurance rebate, with further increases for those aged 70 or older. The government argues this age discrimination is unfair and plans to remove the top-ups, saving $3 billion over four years. The savings would be redirected to aged care, which the government says is in need of funding.
On Wednesday, the Senate voted to remove the legislation from the government's agenda, with the Greens, opposition and other crossbenchers supporting the move. Greens leader David Shoebridge said the party would support the bill only if pensioners were exempt. "You can't take a billion dollars from 1.2 million pensioners," Shoebridge said.
Health Minister Mark Butler reintroduced the bill into the House of Representatives on Thursday, but its future remained unclear when parliament broke for the week. The months ahead will see negotiations between the government and the Greens.
One Labor backbencher, receiving a flood of emails, said the measure was causing "a lot of pain" in electorate offices. That MP suggested the government should at least remove pensioners from those affected, if not drop the bill entirely.
Teal independent MP Monique Ryan, a medical doctor, has been a strong critic. She commissioned data from the Parliamentary Budget Office and argued against stripping support from older Australians.
The standoff is a significant test for both Shoebridge, in his first major legislative challenge as Greens leader, and Butler, who will need to demonstrate his ability to negotiate ahead of reforms to the National Disability Insurance Scheme. The government must also contsider the budget savings it stands to lose if the measure is diluted or defeated.