Putting members’ health before profit

Budget surplus paves way for restoration of 30% Rebate on private health

The return of Australia’s economy to surplus should pave the way for full restoration of the 30 per cent rebate on private health insurance.

Matthew Koce, CEO of Members Health, the peak body for 27 not-for-profit, member owned health insurers welcomed Treasurer Josh Frydenberg’s announcement of a balanced budget in 2018-19 and projected surplus in 2019-20, up to $7 billion.

“But as Australia’s economy returns to surplus, so too should the full private health insurance rebate, which helps millions of Australian families access vital health benefits,” Mr Koce said.

“Everyone should have the same opportunity to access private health care,” Mr Koce said. “Restoring the full rebate is about equity and fairness and Budget circumstances now allow for it.”

The Australian Government Private Health Insurance Rebate is a fundamental pillar to the sustainability of the entire health system, and its value is undeniable.

More than half of the Australian population holds some form of private cover and almost 70 per cent of all elective surgery and 60 per cent of all admissions involving surgery are delivered in the private sector. The Rebate costs the Government about $6 billion a year, but leverages almost $21 billion in private health benefits, which millions of Australians rely on.

“That’s a three-fold return on investment for Government and drastically reduces the burden on the taxpayer purse,” Mr Koce said.

“The Rebate is means tested, ensuring it only goes to those that need it. But cutting its value every year is exacerbating premium affordability issues and forcing younger, healthier individuals and families out of the private system onto already stretched public waiting lists.”

Currently sitting at about 25 per cent for most people, continued indexation of the Rebate could see it reach a low of just 20 per cent over the next few years.

Research done by Members Health shows families would have saved about $284 a year on their premiums if cuts to the 30 per cent Rebate were not introduced. Families with Gold hospital cover, no extras and with a combined income of less than $180,000, would have saved about $1,422 on their health insurance over the past five years if they had the full 30 per cent Rebate.

“Further indexation cuts to the rebate will push up premium costs and hurt the hip pockets of all Australians with health cover. It is staggering to think that the once 30 per cent rebate is on track to fall below 25 per cent next year,” Mr Koce said.

“We are entering unchartered territory.”

“Without urgent policy intervention or end date to the indexation of the Rebate, it will continue to decline until it becomes effectively worthless.”

The Government has stated publicly that it plans to restore the Rebate when Budget circumstances allow. Members Health urges the Government to commit to a timeline of meeting that pledge, as an urgent priority.

Members Health is the peak body for 27 not-for-profit, member owned and community based health funds, which cover the lives of more than 3.7 million people. They are run exclusively for policyholders, not shareholders or overseas investors and are closely connected to their communities of interest.


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