The passage of the means-testing legislation through the Lower House signals a shift in the balance of Australian healthcare.

The consequence of the Gillard Government’s decision to means-test the 30% Rebate is that Australians needing healthcare will be torn between increasing costs and longer waiting lists.

Private Healthcare Australia has consistently cautioned that means-testing the 30% Rebate will force people out of the private healthcare sector and into the public system, and it will force premiums up for those who remain in private cover.

The Government’s arguments are flawed. The Minister says means-testing is about fairness, but as people drop or downgrade their hospital cover, premiums will have to increase for those who remain in private cover.

More than half of the Australian population has some form of private health cover and they don’t think they’re rich. For many of them, the Rebate is the only form of Government assistance they receive.

Government figures show that 5.6 million privately insured Australians live in households with an annual household income less than $50,000 and, of those, 3.4 million have an annual household income of less than $35,000.

The Government has made many incorrect assumptions during this debate, like failing to consider the impact of people downgrading their private health cover, and not taking into account the flow on effects into the public hospital system of those people who drop and downgrade their cover.

The Independent Deloitte Report remains the most accurate assessment of the impact of this legislation:

• 1.6 million Australians will withdraw from their private hospital cover over 5 years and 4.3 million will downgrade to lower levels of cover;
• 2.8 million people will withdraw from their general treatment cover over 5 years and 5.7 million will downgrade their cover;
• premiums will rise 10 per cent above what would otherwise be expected;
• the costs of treating consumers in the public hospital system are expected to rise substantially above what is currently anticipated by Government (Deloitte estimates that additional operating costs over five years will be $3.8 billion); and
• the Report concludes that another 845,000 admissions to public hospitals will be required over the next five years.

Contact:  Jen Eddy 02 62021000

The CEO of the AHIA, Dr Michael Armitage said the fact that more than 12 million Australians have some form of private health insurance reflects a belief that private health provides better cover, better access and better care.

Dr Armitage rejected claims by the Doctors Reform Society that recent PHI growth was a result of wealthier Australians joining private health insurance to avoid the public system, “even though once they get in it is high quality care, even better than in private hospitals”.(Doctors Reform Society)

“The Productivity Commission has found that the private sector delivers shorter waiting times, shorter lengths of stay and higher productivity, but most importantly it provides a safer health care environment. Therefore it makes no sense for the Australian Government to divert resources from the private health sector only to place increased pressure on the public hospital system.

“It is a myth that private health cover is only for the wealthy. Of the 12 million privately insured Australians, Government figures show that 5.6 million have an annual household income less than $50,000 and, of those, 3.4 million have an annual household income of less than $35,000.

“The Private Health Insurance Industry has maintained that means-testing the 30% Rebate would force people out of the private system and into the public sector; that it would increase pressure on the public hospital system; and force premiums to increase, disadvantaging lower income earners who remain in private health insurance.

“These latest figures demonstrate that the balance between the private and public health sectors is working and that the Government should maintain the existing Rebate and other incentives,” said Dr Armitage.

Media contact: Jen Eddy 02 62021000

We used to be the AHIA, but no longer!

We still represent the Private Health Insurance industry and the millions of Australians who have chosen Private Healthcare Cover through our industry health funds.

We are now over 12 million Australians strong

There are now over 12 million Australians with Private Healthcare: families, grandparents, parents, children, couples and singles.

These Australians have chosen Private Healthcare because it provides better quality healthcare – better cover – better access – better care – for themselves and their families.

In fact, over 50% of Australians now rely on Private Healthcare.

Our Vision

Our vision is to work independently and with governments to provide Australians with the best cover, the best access, and the best healthcare services in the world.

Our Role and Mission

Our role is to represent the over 12 million Australians who choose better quality healthcare services. Our mission is to put their healthcare needs first.

Our Quality Standards

We clearly stand for the provision of ‘better quality’ healthcare services for all our members

Our Values and Beliefs

Our members
• value responsibility and believe in taking control of their own healthcare affairs.
• value freedom of choice and believe in their right to choose their own health cover and treatment.
• value quality and believe in their right to choose better quality healthcare services.
• value service and believe that speed and convenience are important aspects of service.
• value affordability and believe that governments need to recognise the real financial contribution that members make in supporting Australia’s health system.