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Roxon takes health rebate debate to conferenc -

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ELEANOR HALL: The Federal Health Minister this morning picked a fight with the health insurance
industry.

Nicola Roxon told the industry's annual conference in Melbourne that the Government will clamp down
on the industry by blocking any unreasonable requests to increase premiums.

She also vowed to reintroduce legislation to means-test the federal private health cover rebate.

But health insurance companies say the rebate furore misses the point.

In Melbourne, Simon Lauder reports.

SIMON LAUDER: The theme of this year's Health Insurance Association conference is Private Health
Insurance: Investing In The Future.

The guest speaker and Federal Health Minister acknowledges her interpretation of the theme may not
match the industry's.

NICOLA ROXON: My history might say I haven't had a history where we've avoided fights in the past.
It's not in my inclination to provoke them. We certainly end up being in them sometimes and that's
really, I think, the lot of health ministers in many situations and I want to take the opportunity
to talk to you about our long term plans.

SIMON LAUDER: The private health insurance industry vigorously opposes the Government's plan to
means test the 30 per cent health insurance rebate.

This morning Nicola Roxon made it clear the Government is sticking to its guns.

Ms Roxon says the rebate cost the Government $4 billion last year, up from $1.5 billion in the year
2000. She says it's not sustainable.

NICOLA ROXON: Those people who can afford to pay more for their health insurance should. Private
health incentives should be supporting nurses, taxi drivers, secretaries to take out private health
insurance. These are your core business. Not members of Parliament or CEOs or even millionaires who
currently qualify for the rebate support.

We clearly don't believe that subsidising the insurance of millionaires is more important that
investing in more doctors or nurses, chronic disease programs, cancer care or hospital
infrastructure.

SIMON LAUDER: The industry has produced research showing the means test would lead to an exodus
from private health cover and put the extra burden back on the public system.

But Ms Roxon says the Government's research indicates less than a third of 1 per cent of private
health patients would drop their cover because of the change and she argues that continuing to hand
out the rebate indiscriminately is the more expensive option.

NICOLA ROXON: And you know and I know that the vast majority of high income earners do not keep
their insurance because of the rebate. Research has shown that up to 76 per cent of high income
earners regard it as essential to have private health insurance with the main reason being the
insurance provides security and peace of mind.

Moreover the incentive to take up or keep private health insurance will be increased by the
proposed increase in the rate of the Medicare levy surcharge for high income earners to either 1.25
per cent or 1.5 per cent.

SIMON LAUDER: It's one thing to take on the industry at its own conference, it's another challenge
altogether for the Government to effect the change it trumpets. The change to the rebate was
already rejected by the Senate in September. Nicola Roxon says it's likely she'll reintroduce the
bill in the next fortnight.

The Minister's also signalling her intention to play hard ball on incremental changes to health
cover - the insurance premiums. Funds have little more than a week to lodge applications for
premium adjustments.

Ms Roxon says any requests which seem unreasonable will be sent back to the insurers.

NICOLA ROXON: Each insurance application will be considered on its merits but I'm determined that
the premium increases should be the minimum necessary to ensure affordability and value of private
health insurance continues. This may involve requesting resubmissions as was the case for many
funds last year.

SIMON LAUDER: The Labor Party has been promising a shakeup of Australia's health and hospital
system since the 2007 election campaign. Nicola Roxon is indicating it may still be an issue at the
next election.

NICOLA ROXON: In December we're holding a specific health COAG (Council of Australian Governments)
meeting, heads of government, to discuss reforms with the States and we will then present our
national reform plan in early 2010.

Our preference is to work with the States and Territories to deliver this reform plan but if they
won't join us on this journey we will seek a mandate from the Australian people at the next
election to pursue necessary change.

SIMON LAUDER: The Minister's 45 minute speech was followed polite applause and a reply from the
president of the Australian Health Insurance Association, Richard Bowden.

RICHARD BOWDEN: And you know it is really difficult for us as insurers to play the equity game. I
understand the equity game has to be played at a government level but it's really hard for us to
look customs in the eye and say, well yes, you should get that 30 per cent rebate but you
shouldn't. And that's something that we really do need to work through.

I look at this rebate as not dissimilar to tax breaks to allow people to save for their future.
This is a tax break on investment for people to look after their health and we have to find that
happy balance.

ELEANOR HALL: That's the president of the Australian Health Insurance Association, Richard Bowden,
ending that report from Simon Lauder in Melbourne.