Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Roxon warns private health insurers about rising premiums.

Download WordDownload Word



This transcript has been prepared by a source external to the Parliamentary Library.


It may not have been checked against the broadcast or in an y other way. Freedom from error, omissions or misunderstandings cannot be guaranteed.


For the purposes of quoting verbatim from a transcript, it is advisable to verify the transcript against the broadcast.





Monday 12 May 2008

Roxon warns private health insurers about rising premiums


TONY EASTLEY: We already know that tomorrow's budget will contain health policy changes that will allow young people to drop their private health insurance. 


The income threshold for singles to avoid paying the Medicare levy will increase from $50,000 to $100,000 and for couples it increases from $100,000 to $150,000. 


It will mean fewer people needing private health insurance. The private health insurance industry is warning there could be double digit rises in insurance premiums as a result. 


That's brought a quick response from the Federal Health Minister Nicola Roxon, who says that before health funds get any approval from government for premium rises, they should look at how they do business. 


Nicola Roxon has been speaking to our chief political correspondent, Lyndal Curtis. 


LYNDAL CUTRIS: Nicola Roxon, are you prepared for a flood of maybe 400,000 people coming back to the public health system from your decision to scale back the Medicare surcharge? 


NICOLA ROXON: We support the private health insurance industry and we believe as a government that you need both a strong public health system and a strong private health system. But we're not prepared to give working families a whack in the process and that's what the previous government did.  


They didn't adjust the rates and it now means that people who are earning less that average incomes were stuck with this choice of either paying a tax or taking out private health insurance. That wasn't what was intended when the previous government announced the measure. 


LYNDAL CUTRIS: But isn't there a chance this will weaken the private health insurance industry because the young healthy people will move away from private health insurance because it's harder for them to afford, if they don't have to pay for it? 


NICOLA ROXON: I think the point is we need to have both systems being strong systems. We've remained very strongly committed through the rebate to the private health insurance industry and those people who choose to take it out. But we're not going to force people who are on below average incomes to either be taxed or take out insurance. 


LYNDAL CUTRIS: The industry's predicting that it could see premiums rise between 10 and 11 per cent. Are you prepared to wear the blame for the sort of rise? 


NICOLA ROXON: I think that the private health insurance will have to look very closely at itself if we're talking about those sorts of increases. There were already significant increases this year. I don't think that the industry can keep demanding increase after increase and not look at their own cost structures a little more closely.  


But let's be straight here. This is just a tax that the previous government put on working families, we're adjusting the threshold to ensure that working families don't get caught by that Howard government tax, and all we're doing is adjusting those thresholds to make them fair. I don't think anyone could complain about that. 


LYNDAL CUTRIS: But if this decision does lead to premium rises - significant premium rises - isn't the decisions then also putting pressure on those people who chose to private health insurance? 


NICOLA ROXON: We will look very closely, as I did this year, at any increases that are sought in the coming year. I don't think the industry can use every change and every reason for an increase. Sometimes they have to look at what actually might keep their cost structures down. 


LYNDAL CUTRIS: This decision is likely to mean people are going from the private systems back to the public system. Will there be moves in the budget to compensate the public system for having to carry this extra burden? 


NICOLA ROXON: We've already announced a large number of measures that are going to put much extra resources and much needed resources into our public hospitals. A billion extra dollars in the coming 12 months, $600 million for elective surgery, up to 10,000 extra nurses.  


These are initiatives that we're strongly committed to, they are initiatives that are very important for our public hospital system, and we will continue to work with the states to make sure that we can get the best possible services out of our public hospital system and we'll continue to support the private industry with the measures I've outlined. 


TONY EASTLEY: The Federal Health Minister Nicola Roxon speaking with chief political correspondent Lyndal Curtis.