Members Health says Australian families would be hundreds of dollars better off each year if the federal government fully restored the 30 per cent Rebate on private health insurance.
The value of the rebate has declined in recent years as a result of a range of reforms by successive governments, including means testing and a reduced level of annual indexation - the reforms mean the contribution of the rebate to premium declines every year.
Members Health represents the 25 private health insurers that are not-for-profit and member-owned. Its funds provide private health insurance to over 1.7 million Australians.
Private Healthcare Australia has said the federal government should avoid any changes to the rebate that would further erode its contribution to premiums
Members Health says research it commissioned shows families would have saved around $284 a year on their premiums if reforms to the 30 per cent Rebate were not introduced in 2014.
Overall, families with top hospital cover, no extras and with a combined income of less than $180,000, have spent about $1,422 more on their health insurance over the past five years than they would have with the original 30 per cent Rebate.
“That’s $1,422 that could have gone towards paying school fees, uniforms or books, rent, the mortgage, energy bills, or even helped pay for a family holiday,” said Matthew Koce, CEO of Members Health, who added the situation will worsen based on current policy and trends.
“Further indexation cuts to the rebate will push up premium costs and hurt the hip pockets of Australian families. It is staggering to think that the once 30 per cent rebate is on track to fall below 25 per cent next year,” said Mr Koce. “The Rebate could reach a low of just 20 per cent over the next few years.”
“The Rebate is in the public interest and its value is undeniable. It costs the Government about $6 billion a year, but leverages almost $21 billion in private health benefits, which millions of Australians rely on. That’s a three-fold return on investment for Government and drastically reduces the burden on the taxpayer purse,” he added.
“Private health not only guarantees people fast access to high quality care, when it is needed, it also takes pressure off the already stretched public health system.
“Public hospital wait times continue to widen. Last year there were waits of more than 12 months for some elective surgeries; there are staff and bed shortages; patients don’t have choice of doctor with many being treated by junior doctors and all this comes despite federal government funding to States continuing to rise at more than double CPI.
“With a $7 billion surplus expected in 2019-20, and some $45 billion forecast by 2023, we call on all sides of politics to safeguard the Rebate for all Australians, and restore it to 30 per cent.
“The Rebate is means tested so it only goes to those that need it. Rising cost-of-living pressures are increasingly impacting Australian families and restoring the Rebate will significantly reduce pressure on tight household budgets.
“Nothing is more important than the health of you and your loved ones. It is important that everyone has the opportunity to access private health care – not just the wealthy. Restoring the full rebate is about equity and fairness and Budget circumstances now allow for it.”