The federal government has announced its intention to reduce the higher rebate for Private Health Insurance for people 65 and over, saving around $750 million p.a. This would make the rebate consistent regardless of age. It could increase out-of-pocket premiums by more than $1000 a year for a couple with "gold" cover insurance. Organisations that represent older Australians are demanding the opposite be the case, they want urgent action to reduce the cost of private health for the elderly.

On top of the $62.2 billion p.a paid directly to pensioners as cash payments, a further $47 billion is invested by the federal government in the aged care sector, that's an average of nearly $8,000 per year for every older Australian. $24.2 billion goes to funding permanent residential aged care facilities and nursing homes. $12.9 billion is directed toward supporting older Australians living independently, $8.7 billion in home care packages. $3.3 billion for the Commonwealth Home Support Program for the elderly, other minor expenditure accounts for another $3 billion .

With an ever increasing aged population, and with the taxpaying pool ever decreasing, this kind of mind boggling expenditure of more than $110 billion annually is not sustainable long term. How should this be reduced to save the federal budget bottom line?