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

“Members of Parliament still making up their minds on this important issue need to realise that the Treasury figures on which the Government is relying are fanciful and should not be used as a basis for making a decision which will disadvantage their constituents,” said Private Healthcare Australia CEO, Dr Michael Armitage.

“Minister Plibersek, like Minister Roxon before her, claims that means-testing the 30% Rebate will save $100 billion over the next 40 years.

“The Government has failed to release the modelling to substantiate that claim and now a report by Booz & Co exposes the Government modeling as both flawed and misleading.

“The Booz & Co Report highlights that the Rebate has remained as a constant 3.5% of total public and private health expenditure over the last decade, and is a “small component of total healthcare spend (8.1%)” and has only increased 0.2% over the last 10 years.

“Previous claims that the Rebate is the fastest growing area of health expenditure are also false.

“The Booz & Co report demonstrates that nobody should rely on the Government’s modelling and that there are not the savings to be found from this measure as claimed.

“The report supports claims that means-testing the 30% Rebate is poor public policy. And we know from the Deloitte Report last year that means-testing the Rebate will end up costing government more within five years as spending on public hospitals will need to be increased as people drop and downgrade their private cover.

“Taking away the 30% Rebate from people who are taking responsibility for their own health care needs by being privately-insured is poor health policy and it will have a detrimental effect on the entire health system.

“All private health fund members will pay extra for their health insurance in subsequent years if this legislation is passed, and Members of Parliament should reject the legislation because it will impact negatively the healthcare of all their constituents.,” said Dr Armitage.

Further Information: 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.