Budget update: proposed changes to the private health insurance rebate

Release date: 24 June 2009

You may have seen from recent media reports that the Federal Government's proposed means testing of the 30% private health insurance rebate, and increases in the Medicare Levy Surcharge, have passed through the House of Representatives - from here, the legislation is required to go through the Senate before it can be implemented.

The Government used its majority power in the Lower House to support the draft legislation, but also to vote against the Opposition's proposed tobacco tax alternative. This is despite Treasury confirming that the proposed tobacco tax can save $300m more than the Government's planned changes to means test the 30% rebate.

The legislation will now be subject to an inquiry by the Senate Community Affairs Legislation Committee, due to report in August 2009, before it is debated in the Senate.

The Opposition has indicated that it will not support these changes in the Senate, so the Government will require the support of both the Greens and independent Senators for this proposal to succeed.

This process may take some months to complete, and any changes will not be implemented until 1 July 2010.

We are not supportive of these changes because they have the potential to place financial pressure on millions of Australians who value choice and access to affordable health care. They also place the currently strong and effective balance between the public and private systems under threat.

MBF remains committed to helping you find ways to continue to be able to best manage your health needs, and to working closely with the Government and the health sector to ensure you continue to have ongoing choice and access to quality healthcare.

Richard Bowden
Managing Director
MBF Australia Pty Limited