The political battle over private health insurance reached a peak in recent days following the annual 1 April increase in premiums.
The already fierce battle, with a clear policy difference between the Turnbull government and Labor opposition, was heightened by shadow health minister Catherine King's refusal on Monday to rule out changes to the private health insurance rebate in response to Labor's planned Productivity Commission inquiry.
Health minister Greg Hunt leapt on the statement, accusing Labor of wanting to "dismantle" private health insurance. Labor leader Bill Shorten responded by saying it had "no plans" to scrap the rebate.
In a statement to mark the annual 1 April increase in premiums, which this year is the lowest since 2001, Ms King accused the industry of "making record profits at the same time as families are paying more than ever for their private health. It isn’t fair and something needs to change."
She accused the Turnbull government of defending "big business" and protecting private health insurers at the expense of families.
"In contrast, Labor has a plan to shift the balance back to Australians – by capping private health premiums at 2 per cent for two years and tasking the Productivity Commission with the biggest review of private health insurance in twenty years," she said.
In a radio interview, prime minister Malcolm Turnbull highlighted statements from industry, that the cap will simply lead to a "massive increase" in premiums once it is lifted after two years.
"You run the risk of course, that you start putting some of the smaller funds out of business," he added.
"The way to ensure private health insurance premiums are affordable, is to put downward pressure on the costs of the services they deliver. You can see that we have been done that with devices, prosthesis and so forth, that’s got to be the focus."
In a media conference, Ms King acknowledged concerns about the ability of small health insurers to accommodate the cap, saying a Labor government would work with the prudential regulator to "ensure that this does not mean that we see a consolidation of the market."
APRA executive board member, Geoff Summerhayes, recently said premium increases are being driven by higher claims costs, not the profitability of private health insurers.
Labor also criticised the Turnbull government over its legislation implementing reforms announced last year, accusing it of engaging in a cover-up.
The legislation includes the removal of Benefit Limitation Periods (BLPs), following the reinterpretation of legislation originally passed by the parliament in 2007. It will ensure consumers with impacted policies are protected from having to repay the rebate and are not retrospectively liable for the Medicare levy surcharge or lifetime health cover loadings.
Private Healthcare Australia CEO Dr Rachel David described criticism of the change, and some related media reports, as "conspiracy-laden...fake news."
‘When the Department of Health started to look into the legislation around BLPs as part of the PHI reform process, it found in 2007 it had made a minor mistake in the drafting of that legislation which needed to be fixed. But regardless of that, health funds are already engaged in a process to streamline products to make it easier for consumers to choose their health insurance. As part of this reform process it has been agreed BLPs will be phased out. No consumers have been negatively affected at all by this.”