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Thursday, 10 October 1996
Page: 3917

Senator NEWMAN —Yesterday in question time, I undertook to get some further particulars for Senator Neal to a question she asked. I seek leave to have them incorporated in Hansard .

Leave granted.

The document read as follows

I refer the minister to the three 5.1 per cent increases in health insurance premiums put forward by the National Mutual subsidiaries. How many further applications for insurance premium rises are pending; and is it not a fact that the health insurance rebates are now practically worthless as a result of these premium increases?

I ask a supplementary question. I am a little disappointed that the Minister representing the Minister for Health and Family Services is unable to answer on an issue which is of such fundamental importance to a large number in the Australian community. But while she is asking the minister the answer to the previous question, firstly, could she also find out from the minister what the net worth of the rebate will be in light of the premium increases in private health insurance since the budget; and, secondly, could the minister tell us what increased percentage participation in private health insurance is anticipated to come about annually as a result of the private health insurance rebates?

There are at present three notifications by health insurance funds of proposed rule changes increasing premiums under consideration by the Government.

The health insurance incentives are worth exactly as much as they were before the premium increases: up to $450 a year for families, $250 for couples and $125 for singles. As the premium increases would have occurred anyway, people receiving the incentives will still be up to $450 a year better off than they would have been in the absence of the incentives.

The `net worth' of the incentives will thus be up to $450 a year for families, $250 for couples and $125 for singles.

It is estimated that in the absence of the incentives the private health insurance participation rate would have fallen to around 31 per cent by July 1997. It is estimated that the announcement of the incentives will slow the rate of decline, resulting in a participation rate of 32 per cent by July 1997. The incentives are estimated to increase the participation rate by 2 percentage points through the 1997-98 financial year. Together with the estimated impact of the Medicare surcharge for uninsured high income earners, the participation rate at the end of the 1997-98 financial year is estimated to be 35.5 per cent.