How many impacted by rebate removal on basic cover?

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Private Healthcare Australia says Labor needs to clarify how many policies will have the private health insurance rebate removed and how many low-income earners will be hit with higher premium increases because of its plan to remove the rebate from basic cover policies.

Shadow health minister Catherine King confirmed Labor is sticking with its "already announced" policy but is not considering any other changes.

However, according to Private Healthcare Australia CEO Dr Rachel David, Ms King needs to explain what the “already announced” change means for millions of low-income earners with private health insurance.

“In the media today Labor said it would remove the rebate on so-called junk policies, but to date no-one has explained how a ‘junk policy’ is defined. Labor should come clean and explain how many policies are affected, who will be impacted, and by how much premiums will increase in the future as a result of this measure," said Dr David.

“How will this affect the 250,000 pensioners with an annual income of less than $30,000 and the 125,000+ retirees living off their superannuation with an annual income of less than $50,000? It is not just older Australians who will be affected by Labor’s rebate measures. More than one quarter of all people with PHI (27%) have an annual income under $30,000 and almost half of all people with PHI (47%) have an annual income of $50,000.

“The rebate helps to keep premiums affordable, encourages Australians to take out private health cover and eases pressure on the public hospital system.

“The means-tested PHI rebate is paid to individuals on low and middle incomes to help them access non-emergency surgery, mental health care and dental care among other medical procedures. It is not paid to health funds."

Dr David said basic cover policies, often euphemistically called 'junk' policies, are more common in regional and rural areas because it ensures choice of doctor in local public hospitals.

“What is Labor’s plan for this sector and how will they make up the funding shortfall to regional public hospitals?" she asked.

“The PHI Rebate is a critical component of Australia’s health system. Labor needs to issue a further clarification so Australians can be clear on what exactly their plan is for private health insurance."