Not a 'serious' option for health system

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The private health sector has slammed the Greens for proposing to abolish the private health insurance rebate.

The Greens propose abolishing the rebate and redirecting the spending to other parts of the health system.

The rebate, which started life as an across-the-board 30 per cent government contribution to the cost of private health insurance, has been the subject of significant reform in recent years.

These reforms, which have included means testing and changes to indexation, mean the value of the government's contribution to the cost of private health insurance is declining over time. Annual spending on the rebate is also largely steady at just over $6 billion.

Private Healthcare Australia chief executive Dr Rachel David said the Greens' proposal would put choice "out-of-reach" for low-income earners and put unsustainable pressure on public hospitals.

The private sector currently accounts for over two-thirds of non-emergency surgery in Australia with private health insurers contributing over $20 billion in benefit outlays.

“No serious health policy-maker would contemplate the Greens proposal to abolish the PHI rebate as even a vague option for the future of Australia’s health system," said Dr David.

"It would force low and middle-income earning Australians, the people who benefit from the means-tested rebate, out of the private system and add enormous pressure to public hospital wait lists."

Dr David said this latest policy announcement reflects the Green's 'ideological' opposition to the private sector and simply repeats the "the same attack on the private health sector before every Federal Election."

“Both major political parties understand the critical role the PHI rebate plays in maintaining balance in our mixed private public health system and ensuring its sustainability into the future. The balance between our public and private systems is vital to maintaining our world class health system.

“More than half of the Australian population, 13.5 million people rely on PHI for their health care. Research repeatedly shows that 80% of them value their PHI and want to keep it. They believe they get value for money and in addition to the timing of medical treatment they cite choice of specialist for continuity of care and choice of hospital as the main reasons," she said.

Dr David also described s a "myth" the suggestion private health insurance is for the wealthy.

"More than half of the 13.5 million people who hold PHI have disposable incomes under $50,000 per annum. Many of these are full pensioners and superannuants who are making considerable sacrifices to maintain their health insurance. These are the people the Greens will disadvantage most.

“Financial incentives including the means-tested rebate are a proven way to promote participation and keep private cover more affordable for all Australians. An independent study into the financing of Australia’s health system concluded that at current settings, a dollar spent by the Government on the PHI Rebate is up to 15% more efficient than a dollar directed to the public system."