Rebate spend finished the year lower than expected

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The Department of Health's 2019-20 annual report has confirmed spending on the Private Health Insurance Rebate finished the year almost $200 million lower than forecast.

Government spending on the rebate finished the year at $6.076 billion - $197 million lower than the $6.273 billion forecast.

Confirmation of the lower than expected spend comes as private health insurers call for a restoration of the Rebate to 30 per cent.

The Rebate has been subjected to a series of reforms over the past decade, including the introduction of a means test and a switch in how it is indexed. These changes have led to a steady decline in the value of the Rebate as a share of premium. It is now less than 25 per cent.

"It is not clear if this is an ideological shift by the Coalition, or an ideological drift while no one is paying attention. However, the lack of support for private health is not only doing damage to the 13 million Australians with private health insurance, but all Australians," said Private Healthcare Australia CEO Dr Rachel David in a recent opinion piece.

"Supporting private health care is the cheapest and most effective way government can supply health care. Simply put, with a rebate the government can leverage billions of dollars of extra health care services. The alternative is for governments to spend billions more on public services," she added.

Private Healthcare Australia has called for the gradual restoration of the Rebate to 30 per cent.