Return to surplus means time to deliver on restoring rebate

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Members Health says a federal government return to Budget surplus "should pave the way" for full restoration of the 30 per cent rebate on private health insurance.

Members Health represents 27 not-for-profit and member-owned health insurers. CEO Matthew Koce said the association welcomed Treasurer Josh Frydenberg’s announcement of a projected surplus of around $7 billion in 2019-20.

“But as Australia’s economy returns to surplus, so too should the full private health insurance rebate, which helps millions of Australian families access vital health benefits,” said Mr Koce.

The Coalition has stated publicly it plans to restore the rebate when Budget circumstances allow.

Members Health said it urges the government to commit to a timeline of meeting that pledge.

“Everyone should have the same opportunity to access private health care,” said Mr Koce. “Restoring the full rebate is about equity and fairness and Budget circumstances now allow for it.”

“The Rebate is means tested, ensuring it only goes to those that need it. But cutting its value every year is exacerbating premium affordability issues and forcing younger, healthier individuals and families out of the private system onto already stretched public waiting lists.”

The rebate currently sits at a maximum of around 25 per cent of premium but it declines annually and could fall to a low of around 20 per cent over the next few years.

“Further indexation cuts to the rebate will push up premium costs and hurt the hip pockets of all Australians with health cover. It is staggering to think that the once 30 per cent rebate is on track to fall below 25 per cent next year,” continued Mr Koce.

“We are entering unchartered territory.

“Without urgent policy intervention or end date to the indexation of the Rebate, it will continue to decline until it becomes effectively worthless.”

Around half of the Australian population holds some form of private cover and almost 70 per cent of all elective surgery and 60 per cent of all admissions involving surgery are delivered in the private sector.

The government currently invests around $6 billion a year but it leverages almost $21 billion in private health spending.

“That’s a three-fold return on investment for Government and drastically reduces the burden on the taxpayer purse,” added Mr Koce.