Health premiums to increase for wealthy

UPDATE: 12.20PM WA Health Minister Kim Hames said he was extremely concerned the health fund premium changes would force extra patients into the public hospital system which was already under “extreme pressure”.

Premiums will rise for almost 2.5 million wealthy Australians from July after the House of Representatives this morning passed the means test for the 30 per cent rebate.

“What changing that Medicare rebate levy means is that people will drop out of private insurance,” Dr Hames said.

“There is an argument about how many. The Federal Government give one figure, the Federal (Australian Medical Association) give a different figure.

“Whatever the figure, it’s going to put increased pressure on our public hospitals, and what it means is that people who are currently in the private system who would go and get their care elsewhere outside the system will then have to come into the public system.

“What the Commonwealth Government are doing to save their budget bottom line is dragging money back to the Federal Government that the State Government then has to spend on the public hospitals to service those patients.

“What it means for ordinary mums and dads who can’t afford private insurance, is that their wait times (for procedures) are going to be longer because inevitably they are going to have to wait for that extra number that come to the public system to be treated as well,” he said

Dr Hames accused the Commonwealth of failing to consult the States over the changes.

Premier Colin Barnett backed Dr Hames comments saying, means testing the private health insurance rebate would prompt many people to drop their private health cover and put more pressure on the public health system.

Mr Barnett today said he was concerned a significant number of people would drop their private health cover.

“What that will mean is they will go out of the private hospital system into the public system and add to the pressure on that.”

Mr Barnett said incentives and encouragement should be provided to people through the tax system to have private health cover if they could afford it.

To cries of "shame" by Opposition MPs, the changes passed 71-70, thanks to support from Greens MP Adam Bandt and independents Andrew Wilkie and Rob Oakeshott.

Separate legislation to increase the Medicare levy surcharge - the tax penalty that hits the rich without cover - was also passed.

An attempt by Tony Abbott to delay the imposition of the means test until after the next election was defeated 72-69.

Mr Abbott has pledged to scrap the means test if he becomes prime minister.

The changes will need to be considered by the Senate, but passage will be a formality with the Greens to back the Government after Labor stumped up $165 million for dental care.

The insurers' lobby group, Private Healthcare Australia, warned the changes would put pressure on public hospital waiting lists as millions of people abandon or downgrade their cover. It would also raise premiums higher than necessary to make up for the lost membership.

The means test will hit singles earning more than $83,000 a year and families on more $166,000. It will be progressively phased out, with singles on more than $129,000 and families on more than $258,000 will lose it altogether.

For a family with a typical $2500 a year policy, their premiums will rise by as much as $1000.

The means test will be imposed from July and save the Budget $2.4 billion over three years.

WA's dominant health fund, HBF has estimated about 200,000 membership will pay higher premiums because they lose all or part of their rebate.