Labor costings confirm the impact of rebate removal

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Labor has confirmed its changes to the private health insurance rebate will save $115 million.

The release of Labor's election policy costing document has confirmed the impact of its commitment to remove the Private Health Insurance Rebate from 'basic' policies.

The move will save $27 million in 2019-20, $28 million in 2020-21, $29 million in 2021-22 and $31 million in 2022-23.

Basic cover policies, which are sometimes referred to as 'junk' policies, are more common in regional and rural areas because while patients may not have access to a private hospital their cover ensures a choice of doctor in local public hospitals.

Labor has also committed to a two-year two per cent cap on annual private health insurance premium increases and a Productivity Commission inquiry into the sector.

Health minister Greg Hunt said removing the rebate on 'basic' policies from 1 July this year could force people who have paid their premium for the year ahead to repay the rebate.

"This will be an administrative nightmare, taking back people’s money – and once more Labor is caught out on the detail of its policies and the implementation.

"Last time in Government, Labor slashed $4 billion for private health insurance, and throughout this campaign they have refused to commit to retaining the full rebate."

Mr Hunt said Labor should "come clean" given the refusal to rule out further changes to the rebate if it wins the election.

"The rebate is critical to maintaining balance in our mixed public/private health system and keeping pressure off public hospitals," he added.