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Claims saying 320,000 will drop health cover are wrong

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Monday, June 25, 2012

Claims saying 320,000 will drop health cover are wrong

Claims today in the Courier Mail that 320,000 Queenslanders will drop their private health insurance and clog up public hospitals because of Commonwealth changes are rubbish, said Health Minister Tanya Plibersek.

Mr Plibersek said State Health Minister Lawrence Springborg’s comments in the story that “the actual number of people affected will be significant” were an exaggeration.

“For Mr Springborg to say that hospital services will be impacted misleads the Queensland public and only serves to spread fear in the community,” said Ms Plibersek.

Ms Plibersek said the story made no reference to Treasury modeling that says that 99.7% of people will not drop their cover as a result of the new law to means-test the private health insurance rebate.

“A family would need to have an income of more than $260,000 a year before they would lose the rebate entirely.”

“To suggest of thousands people who might not even be affected by the changes will drop out is ridiculous.”

“In fact, the latest data from the Private Health Insurance Administration Council shows that during the first three months of this year, when Parliament was debating the new law, another 50,000 people actually joined health funds.”

Ms Plibersek said a Deloitte report referenced in the paper saying people would drop out was out of date didn’t take account of historical data which showed new members were joining health funds all the time.

“Means-testing the private health insurance rebate means that low and middle income Australians no longer subsidise the health insurance of higher income Australians.”

Nearly eight million Australian private health insurance policy holders won’t be affected when the changes take effect from July 1, 2012.

Individuals earning around $84,000 or less and couples and families earning around $168,000 or less would not be affected. Individuals and families would need to be

earning around $130,000 and $260,000 or more to lose the rebate entirely.

Treasury modeling estimates that, after these changes come into effect, 99.7% of people will remain in private health insurance, noting that Lifetime Health Cover and the Medicare Levy Surcharge will continue to encourage people into cover.

For all media inquiries, please contact Simon Crittle 0466 773 531