ACOSS again calls for abolition of rebate

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The Australian Council of Social Service has once again called for abolition of the private health insurance rebate.

In its 2018-19 Budget Priorities Statement, the organisation recommends abolition of the rebate and the Extended Medicare Safety Net, arguing they "inflate health care costs and mainly benefit higher income earners using relatively expensive services."

It proposes redirecting the saving from abolishing the rebate, of around $3 billion per year, into the public health system. The amount is less than the annual increase the Turnbull government has already committed to the states and territories for public hospitals for the five years from 2020.

According to ACOSS, "Despite being a significant component of health expenditure, the PHI rebate has failed in its promise to take pressure off public hospitals by increasing use of private health insurance."

A recent report from economic consultancy Evaluate found one dollar spent on the private health insurance rebate is more efficient than another dollar spent on the public health system.

According to the study commissioned by Private Healthcare Australia, government spending on the rebate is economically efficient, in terms of both direct economic costs and overall welfare gains.

Evaluate principal Alastair Furnival told HealthDispatch, the evidence is clear in that the rebate keeps people in the private system and off waiting lists, and "this is where there is the greatest gain for everyone."