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Health insurance numbers fly in face of warnings

ANXIETY about public hospital waiting lists clearly outweighs concern about premium costs. Health insurance

numbers climbed by more than 200,000 in the past year, despite budget changes that make it easier for

middle-income earners to drop their insurance.

The Federal Government''s second round of health insurance changes, which would axe health insurance rebates for

high-income earners, face defeat, and today it will publish figures that it says show the highest rate of

health fund membership in seven years.

The rise contradicts claims by the health funds and the Opposition last year that the first round of changes

would drive hundreds of thousands of people out of health funds.

Those changes lifted the income people could earn before being required to take health insurance or pay an

additional 1 per cent Medicare surcharge levy from $100,000 to $140,000 for families and $50,000 to $70,000 for

The fact that people are choosing to shell out typically about $2500 in annual health insurance premiums for

family cover probably reflects reluctance to rely on the public hospital system, bolstered by the impact of the

lifetime health cover loadings. These add a 2 per cent loading for each year people aged over 30 delay taking

The Government''s proposed changes would phase out the 30 per cent health insurance rebate for singles earning

more than $75,000 and families earning more than $150,000, in three stages: to 20 per cent, 10 per cent and

The Coalition says the rebate cuts will undermine health insurance. The independent senator Nick Xenophon and

Steve Fielding of Family First also oppose the measure.

The Health Minister, Nicola Roxon, yesterday stepped up the Government''s criticism of giving the well-off a 30

per cent rebate. Ms Roxon, who before the election in 2007 pledged that the Government would not remove the

rebate, said yesterday that it was ''''fiscally irresponsible'''' for the Opposition to block the

''''Currently many taxpayers subsidise the health insurance of others who are wealthier than they are,'''' Ms Roxon

''''This means receptionists are subsidising the private health insurance of chief executives, and baristas are

subsidising the barristers collecting their daily coffee.''''

She said the carrot-and-stick approach of the health insurance measures would mean the vast majority of people

would retain their private hospital cover - 99.7 per cent of them, according to Treasury

The effect of the rebate changes is that it would be cheaper for high-income earners to retain their insurance

than pay the additional 1 per cent Medicare levy surcharge. The Government also argues that tax cuts for

high-income earners leave them better off overall.

The Opposition health spokesman, Peter Dutton, said 1 million people were likely to drop or downgrade their

insurance cover, which would trigger premium increases for those keeping their insurance.

''''In seeking to cut the rebate to so-called higher-income earners, the Rudd Government will hammer low- and

middle-income earners with higher prices,'''' Mr Dutton said.

''''Does it want them to also opt out of private insurance and join the queue at our public

''''Every decision Kevin Rudd has taken since coming to government will make our public health system worse -

making a mockery of his oft-repeated promise that he had a plan to ''fix'' the nation''s public

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