The 2018-19 Budget has confirmed government spending on the private health insurance rebate will be $650 million lower over the four years to 2020-21.
The Budget delivered by treasurer Scott Morrison Tuesday night revealed the reduction compared to the forecast included in last year's Budget.
Cumulative spending on the rebate between 2017-18 and 2020-21 is now forecast to be $25.88 billion, down $650 million.
Annual spending on the rebate will rise just $622 million between 2017-18 and 2021-22.
Overall, the commonwealth's total annual spending on health is now forecast to be almost $7.5 billion higher in 2021-22 than 2017-18. Annual spending on Medicare will be almost $5 billion higher. Annual spending on public hospitals will be $4 billion higher.
The Budget Papers do not provide any explanation for the decline but it could be related to the recent small decline in the number of Australians with private health insurance.
According to Budget Paper No.1, "Expenses for private health insurance are expected to increase by 0.1 per cent in real terms between 2017-18 and 2018-19, and remain relatively unchanged in real terms over the period 2018-19 to 2021-22.
"The proportion of Australians with private health insurance is around 54.6 per cent, providing a high level of access to private health services and taking pressure off the public system."