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Minister suggests health insurance premiums will rise.

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LINDA MOTTRAM: The federal health minister, Kay Patterson, has bad news for consumers—health insurance premiums will rise, though she promises to keep the prices down as much as she can. Senator Patterson has the private health funds coming to her for approval to put up their fees by as much as 13 per cent. That’s angered consumers but it has also put extra pressure on the government’s health budget, already stretched by the 30 per cent rebate on premiums.


The minister has indicated she will take her scalpel to those requests, also signalling strongly that the anti-impotence drug, Viagra, won’t get public funding through the Pharmaceutical Benefits Scheme. Senator Patterson spoke to Louise Yaxley.


KAY PATTERSON: We want to ensure that the premiums are as low as possible. The government has a vested interest in that because we pay 30 per cent of premiums and therefore 30 per cent of any increase, so it’s in the government’s interest to ensure those premiums are as low as possible.


LOUISE YAXLEY: Does that mean you won’t be granting any increases?


KAY PATTERSON: I’m not going to talk about individual cases. We have tests that will be applied. That process is being undertaken at the moment. Of course there’ll be increases; we can’t expect premiums not to rise. There has been a reduction in interest rates, there have been increases in salaries, for example nurses salaries, and there has been an increase in the number of claims. But we want to ensure that those premiums are kept to the lowest possible level and that we must ensure that the funds have adequate reserves to meet their demands.


LOUISE YAXLEY: Senator Patterson is open to changes in the 30 per cent private health insurance rebate which costs up to $2.5 billion a year. She’s not ruling out options like saving some money by taking the rebate off extras like physiotherapy or dental.


KAY PATTERSON: I need to look at the rebate ....


LOUISE YAXLEY: There’s no final decision about whether the impotence treatment, Viagra, will be subsidised, but Senator Patterson has all but ruled it out. The Pharmaceutical Benefits Advisory Committee warned of a potential cost blow-out of $100 million a year when it recommended Viagra be given a subsidy, and the minister’s all too aware of the way subsidised drugs can eat into the budget.


KAY PATTERSON: We’ve seen blow-outs in other drugs—the Zyban, the anti-smoking drug in the first, I think it was six days. The anticipated budget for the year had been prescribed, and that is an enormous blow-out.


LOUISE YAXLEY: Senator Patterson is relaxed about a shakeout in the private health insurance funds, saying mergers and industry rationalisation are a matter for the market and the ACCC, not the health minister.


KAY PATTERSON: I’m not going to speak about which ones or what should happen. That’s a commercial decision. We have to ensure that there’s competition and we have a process for that. The ACCC and Professor Fels will look at any suggestion of merger to ensure that appropriate competition is maintained.


LINDA MOTTRAM: Federal health minister, Kay Patterson; Louise Yaxley reporting.