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Government and Opposition misleading on private health.

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Senator Meg Lees Australian Democrats Health Spokesperson

26 February 2002 MEDIA RELEASE 02/080

Government AND Opposition misleading on private health The Federal Government and the Opposition have misled the community about private health insurance, according to the Democrats.

Responding to today’s announcement of an average 7% increase in private health insurance premiums, Democrats’ Health Spokesperson, Senator Meg Lees, said both major parties are sticking their heads in the sand and hoping the problem will go away.

“The 30% Private Health Rebate was never going to keep the costs of private health insurance down,” said Senator Lees.

“The Labor Party knows the rebate is bad policy. In fact former Shadow Health Minister Jenny Macklin has called it “the worst example of public policy ever seen in this Parliament”.

“Instead of doing the hard work to explain the negative impact of the rebate on our health system and particularly its impact on inadequate funding for public hospitals, the Labor Party continues to support the rebate because it believes it is popular with the electorate.

“The Democrats agree with the AMA that there are ways to encourage private health, in particular the use of Private Hospitals, but not by subsidising health funds.

“The money should go directly to the health system, Public or Private, not into the pockets of health fund shareholders,” said Senator Lees

“The Government is now spending $2.3 billion a year to prop up the private health insurance industry. The Australia Institute estimates that amount will be $3 billion by the end of 2002.

“This is public money going straight into industry coffers. It will do nothing to help those Australians languishing on public waiting lists for hospital or dental treatment,” said Senator Lees.

“The most absurd part of this situation is that the rebate was not responsible for bringing people in to private health insurance. While the $2.3 billion rebate lifted the percentage of Australians with private health from just over 30% to 32.2%, the policy of lifetime cover saw this increase to 43%. And lifetime cover cost the Government nothing.

“The Government should immediately cap and means-test the rebate and put the money saved into public health services. Or scrap it entirely and reinstate the Private Bed Day Subsidy - much of what is provided in the private system is already subsidised by Medicare but the bed is not.

“And the Opposition should do the right thing and support the decision in the interests of the health system.

“With a mere 5% of the $2.3 billion rebate, the Government could provide basic dental care for disadvantaged people. Pensioners could get their teeth filled in a matter of weeks, rather than years.

“It is a scandal that in this country people earning $100k a year can get their dental care subsidised while a pensioner can’t afford to see a dentist. The rebate is poor policy and shoddy economics,” concluded Senator Lees. Media requests: Kerrie Thornton 02 6277 3203 or 0438 816 376