Labor right to fire at junk policies but must hit right target

The Consumers Health Forum welcomes in principle Labor’s plan to remove the health insurance rebate from “junk” policies but urges caution in implementing such a measure.

“We have called for the Government in its review of private health insurance to use the health insurance rebate to stimulate comprehensive policies that are standardized, more dependable and easily comparable. Under our proposed MyCover policy, insurance policies that do not meet set criteria should not qualify for the health insurance rebate,” the CEO of the Consumers Health Forum, Leanne Wells said.

“Having previously said they would make the private health insurance rebate unavailable for natural therapies, Labor’s plan is to now extend this by treating policies that provide public hospital-only cover as “junk” policies. While we welcome those measures in principle and have argued that the rebate should be tied to eligible policies that deliver better value to consumers, we need to be mindful about the levels of cover people can afford and continue to push for wider reforms to wind back private treatment costs.

“Without effective reforms to make private care costs more transparent and competitive, many people would either have to drop their insurance or pay out hundreds to cover the loss of the rebate, or pay higher premiums to qualify for private hospital treatment.

“We have welcomed the election promises by both Coalition and Labor aimed at reforming elements of health insurance. The Coalition plan is aimed at making health insurance simpler and more certain and Labor has pledged to withdraw the rebate from the coverage of non evidence-based therapies. The Consumers Health Forum has urged both of those changes.

“The 48 per cent of Australians who have hospital insurance also require a better deal. The fact is that many people take out health insurance in order to ensure they can get prompt elective surgery if they need it. The health insurance rebate costs taxpayers $6 billion a year but has failed to meet government declarations that by attracting more people to private insurance it would reduce strains on the public hospital system,” Ms Wells said.


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