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4 May 2011 Eleven million Australians with private health insurance face further cost of living pressures from the Gillard Labor Government’s plans to means test private health insurance rebates.

New research has found that Labor’s proposals, likely to be re-introduced into Parliament in coming weeks, would increase private health insurance premiums by more than 10 per cent over and above annual premium rises.
 
Those directly affected by the cuts to the rebates will face effective premium increases of 15 per cent, 30 per cent and 45 per cent for their respective tiers, the research highlighted.
 
Shadow Health Minister Peter Dutton said today Labor was determined to press ahead with an ideologically driven agenda at a time when families and the health system could ill afford it.
 
He said Labor didn’t care what impact its actions had on families who are already struggling with rapidly rising household’s bills.
 
Mr Dutton described as “alarming” the findings of the new assessment of the Gillard Government’s plans to means test private health insurance rebates.
 
Mr Dutton said the Economic Impact Assessment of Labor’s proposed changes to the 30 per cent rebates by the respected consultancy firm Deloitte should be of concern to all Australians.
 
“It confirms our worst fears that Gillard Labor has drastically underestimated the impact of the changes it wants to force upon the health sector.”
 
“Julia Gillard and Kevin Rudd before her have shown that they cannot manage the most basic of government programs and in coming months they plan to press ahead with massive changes to the balance between private and public health care in Australia.”
 
“Means testing the rebate threatens to de-rail private health insurance and place unsustainable demands on the public health sector,” Mr Dutton said.
 
The Shadow Minister called on Independents in the House of Representatives and the Senate to carefully consider the outcome of Labor’s proposed changes to PHI rebates which the government’s Greens partners wholeheartedly support.
 
He said the new research revealed in the report released by the Australian Health Insurance Industry Association today that 175,000 Australians would drop private health insurance within a year of means tests being applied and that millions would withdraw or downgrade cover over the next five years would prove disastrous for the health system as a whole.
 
“The Coalition twice has blocked these ill-planned changes to private health insurance and consistently warned that if they went ahead consequences would be significant.”
 
“The Gillard Labor Government says only a few thousands of people will drop out of private health insurance following their changes, but this research by ANOP and Newspoll puts the lie to that.”
 
“It also shows that our public hospitals will be swamped with close to an additional million admissions above normal growth over the next five years and that the costs of that to the taxpayer will be billions of extra dollars.”
 
Mr Dutton said the damage done would compound as time went on with health insurance premiums rising as people drop out and more dropping out as premiums rose with more and more people relying on public hospital treatment.
 
The Shadow Minister pointed out that in the 1980’s and early 1990’s under Labor Government’s private health insurance coverage had plummeted until even Labor Health Minister Graham Richardson warned that the health system was becoming unsustainable.
 
“Julia Gillard is preparing to repeat the mistakes of the past,” Mr Dutton said, “and in doing so is breaking a promise made by Labor in 2007 election that it would not change the rebates.”
 
Mr Dutton said the 30 per cent rebates along with Lifetime Health Cover and the Medicare Surcharge Levy were key measures introduced by the Coalition to encourage the take up of private health insurance and had seen health fund membership climb from a disastrous near 30 per cent in the mid 1990s after a decade and a half of Labor Government to almost 45 per cent in 2010.
Posted in: Media Releases
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