Means testing of private health insurance rebate a deliberate attack on senior Australians

19/01/12

Bronwyn Bishop, Shadow Minister for Seniors, has today condemned Health Minister Tanya Plibersek for her announcement that the Labor Government will this year make a third attempt to introduce means testing for the private health insurance rebate as a deliberate attack on seniors.

Senior Australians with private health insurance will be hit hardest by this Labor legislation as they are more likely to be on fixed incomes and are already under pressure from increased cost of living expenses led by rising electricity costs.

More than half the 10.3 million Australians with private Health insurance live in households with the annual incomes of less than $50,000 a year. But 3.4 million of those live in households with incomes less than $35,000 a year.

1.6 million people are predicted to withdraw from Private Health Insurance if means testing is introduced, Clearly the pain of increased premiums will fall heavily and unfairly on struggling Australians, including millions of senior Australians thereby forcing many of them out of private health insurance and into the public system.

The head of the Private Healthcare Australia, Dr Michael Armitage confirmed to me today that should Labor’s means testing go through, premiums would be forced up 10% above any other premiums rise to make up for those people who drop out.

“Means testing the private health insurance rebate will simply drive up the cost for those who wish to remain in private health insurance. As many senior Australians are on fixed incomes a price increase in their premiums may force them out of private health insurance and that will not only increase the cost of health cover for those who remain in the funds, but will also place greater pressures on the public health system.” Mrs Bishop said.

“This is not a new concern. The attempt to means test the private health insurance rebate has twice failed since the Labor Party came to Government in 2007. The Coalition will remain committed to ensuring that the Private Health Insurance rebate does not become means tested.” Mrs Bishop said.