Government Means Testing Modelling Flawed

09 Feb 2012Media Releases

An independent report released today exposes flawed Treasury modelling in relation to the Government’s proposal to means-testing the 30% Rebate on Private Health Insurance.

“Members of Parliament still making up their minds on this important issue need to realise that the Treasury figures on which the Government is relying are fanciful and should not be used as a basis for making a decision which will disadvantage their constituents,” said Private Healthcare Australia CEO, Dr Michael Armitage.

“Minister Plibersek, like Minister Roxon before her, claims that means-testing the 30% Rebate will save $100 billion over the next 40 years.

“The Government has failed to release the modelling to substantiate that claim and now a report by Booz & Co exposes the Government modeling as both flawed and misleading.

“The Booz & Co Report highlights that the Rebate has remained as a constant 3.5% of total public and private health expenditure over the last decade, and is a “small component of total healthcare spend (8.1%)” and has only increased 0.2% over the last 10 years.

“Previous claims that the Rebate is the fastest growing area of health expenditure are also false.

“The Booz & Co report demonstrates that nobody should rely on the Government’s modelling and that there are not the savings to be found from this measure as claimed.

“The report supports claims that means-testing the 30% Rebate is poor public policy. And we know from the Deloitte Report last year that means-testing the Rebate will end up costing government more within five years as spending on public hospitals will need to be increased as people drop and downgrade their private cover.

“Taking away the 30% Rebate from people who are taking responsibility for their own health care needs by being privately-insured is poor health policy and it will have a detrimental effect on the entire health system.

“All private health fund members will pay extra for their health insurance in subsequent years if this legislation is passed, and Members of Parliament should reject the legislation because it will impact negatively the healthcare of all their constituents.,” said Dr Armitage.

Further Information: Jen Eddy 02 62021000