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Medicare may provide another budget bump -

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ELEANOR HALL: The Federal Government's chances of getting its budget through the Senate have been
dealt another blow, with a key senator demanding that low income families be compensated for any
increase in private health insurance premiums that may follow from the government's changes to the
Medicare surcharge.

The findings of a Senate inquiry into the government's plans to lift the income threshold for the
Medicare surcharge will be released later this afternoon.

And while the main focus of that inquiry has been on any extra burden imposed on the public
hospital system by the tax change, Family First senator Steve Fielding says he's uncovered another

And he is demanding a resolution to it if he's to support the Budget measure, as he explained to
Alexandra Kirk in Canberra.

STEVE FIELDING: Look a lot of the focus with the Medicare Levy surcharge changes has been to do
with who's going to be better off, and obviously families earning over $100,000 get a tax break,
but what Family First has raised concerns about is that families earning between $50,000 and
$100,000 they will get slugged with a private health premium increase and Family First want to know
what the government is going to do for these low income earning families.

ALEXANDRA KIRK: Well there are various views about how much health insurance premiums will rise as
a result of the Medicare change, anywhere between five and ten per cent, how much do you think
people will be worse off?

STEVE FIELDING: Last year the health... private health companies sought around, you know around the
five per cent sort of mark.

Now clearly this change the government is doing is going to actually push premiums even higher than
that, and it is highly likely it will be around the 10 per cent mark. Now, low income...

ALEXANDRA KIRK: Ten per cent on top of the five per cent or 10 per cent all up?

STEVE FIELDING: In total it will be around 10 per cent. Now low income families can least afford
that increase, and Family First wants to know what the government is going to do about it.

ALEXANDRA KIRK: What do you expect the government to do about it?

STEVE FIELDING: Well look, the government should look at compensating these families, they already
provide a rebate already, that rebate needs to be looked at to work out how we can compensate low
income families that are actually taking out private health insurance who could probably least
afford it but do it for the safety and security of their families, and these families shouldn't be
slugged with a higher private health premium.

ALEXANDRA KIRK: Do you expect the government then to lift the rebate above the current level of 30
per cent?

STEVE FIELDING: Well look, what Family First has done is flagged the problem and our concern, the
government has the resources to work out how to work out how to compensate these families.

ALEXANDRA KIRK: But if the government say increase the rebate above 30 per cent then that would
apply across the board and that would be a huge amount of money wouldn't it? And it wouldn't also
just apply to the people your concerned about.

STEVE FIELDING: Look I think the thing is that this is the government's problem and they have to
fix it by changing the Medicare Levy surcharge cut in rates, the government has said this is good
news for families, what Family First is saying, it's not good news for families earning between $50
and $100,000 because they're going to get a huge increase in their private health premiums and
they're the ones that can least afford it.

ALEXANDRA KIRK: The coalition is against the government's plan to lift the income threshold for the
Medicare Levy surcharge, so they're going to vote against it.

The Greens are concerned about any affect on the public health system, that is, people ditching
their private health cover and going back into the public system. Are you also concerned about

STEVE FIELDING: Well look, it's frankly, the public health system is buckling at the knees, we've
had on front pages of papers that little kids wanting heart surgery can't get it, and yes, Family
First are definitely concerned about putting extra pressure on that system, and again, the
government hasn't come clean about what they're going to do to solve that particular problem.

ALEXANDRA KIRK: The government needs your vote in order to get this measure through, have you
raised these problems that you have with the health minister? Have you held talks with her?

STEVE FIELDING: Ah, look, we will be discussing it, I know that we've already had one, we've
already had a number of phone calls already, this is something that is just being discovered, and
look, the Rudd Government is now on notice that they've got to solve this problem.

ALEXANDRA KIRK: So you're saying that any extra increase in the premium, in private health
insurance premiums as a result of this measure is unacceptable to you?

STEVE FIELDING: Well look, it's unacceptable to those families and it's unacceptable to Family

ELEANOR HALL: Family First Senator, Steve Fielding, speaking to Alexandra Kirk.

The Health Minister Nicola Roxon says she won't comment on Senator Fielding's demands for
compensation. She says the best form of relief is contained in the government's Medicare policy.