ACOSS hails means testing of private health insurance rebate

The Australian Council of Social Service has warmly welcomed the passing of important legislation through the House of Representatives today that will lead to means testing of the private health insurance rebate. “This makes sense in terms of equity and the long term sustainability of our vital health system,” said ACOSS CEO Dr Cassandra Goldie.

“We all want our tax dollars to be used in the most effective way possible – targeted to the services we need as a community, as well as to those that most need it. Having low income earners, who can’t afford private health insurance themselves, subsidise the health insurance of those who can afford it is unfair and unsustainable.

“ACOSS has long argued that the rebate disadvantages people on low incomes who can’t afford the cost of private health insurance, and diverts vital funding from general public services. It is an inefficient use of Federal funds that runs counter to the principles of a universal health system, as well as a fair and equitable tax system.

“We believe that health expenditure needs to be targeted to improving health and access to services for those who are missing out. The reality is that private health is significantly more common for residents of capital cities and the rebate has done nothing to alleviate the structural barrier to affordable and timely health care in rural and regional areas with no or little access to GPs, specialists and after-hours care.

“At the same time, and contrary to popular wisdom, the rebate has failed in its aims to relieve pressure on the public health system. Evidence shows that when people with private insurance have an acute injury or illness, they will attend a publicly funded hospital for care.

“The rebate is a luxury we can no longer afford with the growing demands on the health system from our aging population. We have to use public funding wisely, which is why ACOSS is calling for the savings that will be made (around $2.4 billion over three years) to be redistributed to those currently missing out on standards of health that others take for granted. We’ve identified oral health as one of these crucial areas and we’ll scrutinise the overall package carefully to evaluate what’s been offered in this area.

“ACOSS congratulates parliamentarians for taking this brave move in the national interest. We want to ensure this extra money is used to help reduce inequities and improve health outcomes for all Australians,” Dr Goldie said.

Media Contact: Fernando de Freitas 0419 626 155

See Opinion Piece by Dr Cassandra Goldie: ‘Should the private health insurance rebate be means-tested?’ – SMH February 11, 2012.