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Hundreds of thousands to join Public Hospitals waiting lists.

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10 May 2008


Hundreds of thousands of Australians will now rely on public hospital waiting lists as a result of the Rudd Government’s decision to lift the Medicare Levy Surcharge threshold, AHIA CEO, Hon. Dr Michael Armitage said today.

AHIA research conducted late last year found that about 2% of current members would drop Private Health Insurance (PHI) if the MLS threshold for singles was increased from $50,000 to $75,000. With more than ten million Australians currently holding some form of Private Health Insurance cover, about 200,000 extra people will now rely on the already overstretched Public Sector.

Treasurer Wayne Swan has told the media that he will increase the threshold even further, from $50,000 to $100,000 for singles and from $100,000 to $150,000 for couples, which would see even more Australians withdrawing from private hospital cover.

A loss of this magnitude (which can be predicted to add around 400,000 people to the numbers relying on the Public Hospitals) would reverse recent gains in PHI membership and start to tilt the fine balance achieved in the public/private mix of health care funding in Australia.

There will also be a potential increase in PHI premiums for those who remain privately insured.

There are ways in which this could have been avoided, which the Industry would have been happy to share with the Government, but the Government’s philosophical bent got in the way of them delivering the best Policy outcome for all Australians.

The MLS was effectively introduced not as an extra tax, but as part of a package of incentives for people to take out private health insurance. With the other main elements of the Rebate and Lifetime Health Cover, this package was designed to restore and sustain the public/private mix in health care delivery that is generally agreed to be a critical feature of Australia’s health system.

Those Australians forced to wait longer on Public Hospital queues and those Australians who will pay more for their Private Health Insurance must wonder why the Government has made such a blinkered decision, and they should question whether the Government really has their interests at heart.

* Attachment: ALP letter committing to Private Health Insurance Rebate, LHC and MLS

Media contact: Jen Eddy 0439 240 755

The Hon Dr Michael Armitage Chief Executive Australian Health Insurance Association 4 Campion Street Deakin ACT 2600

20 November 2007

Dear Dr Armitage,

Thankyou for your letter of 29 October 2007 seeking clarification on Federal Labor’s policy regarding private health insurance.

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40

per cent rebates for older Australians.

Federal Labor will also maintain Lifetime Health Cover and the Medicare Levy Surcharge.

Labor will maintain the existing framework for regulating private health insurance, including the process for approval of premium increases. Zero per cent premium adjustment is not Labor policy;

I understand Nicola Roxon’s office has also confirmed with you that Federal Labor has no plans to require private health insurance funds to make equivalent payments to public hospitals for patients who elect to be treated as private patients.

I trust this allays your concerns. Federal Labor values it relationship with the private health insurance sector and we look forward to this continuing regardless of the election outcome on November 24.

Yours sincerely

Kevin Rudd Federal Labor Leader Member for Griffith