To keep your rebate, act now before it's too late.

The Federal Government is pushing ahead with its plan to remove the 30% private health insurance rebate for some Australians. The Government’s primary target is the so-called rich, however a new report by Deloitte illustrates that health insurance will become more expensive for everyone because health fund members who are more likely to be younger and healthier will drop their cover whilst others will downgrade their cover.

In targeting the 'rich', the Government will reduce or remove access to the 30% rebate (and 35% and 40% rebates for older Australians) by means testing family incomes. That means the Government will give little benefit to those families who have children, particularly if those families include children who are in school or studying in a tertiary institution and are dependent on their parents’ income.

So, we’ll see a reduction in the number of people covered by private health insurance and many of those who continue with their private cover will opt for a lower level of cover to reduce the financial burden of a potential 40% increase in premiums due to the Government’s selective grab. We’ll also see a shift towards an increase in the average age of people privately insured and therefore we will see a Government-driven increase in health costs, which must be passed on to health fund members through higher premiums.

And it’s not good news for those people who opt out of private health insurance and take their chances with the public hospital system.  There will be even more pressure on the public hospital system elective surgery waiting lists throughout Australia, and remember, you won’t have the benefit of choosing your preferred Specialist or the hospital where you are eventually treated, and of course, out of pocket charges for ancillary (or ‘extras’) services like dental, optical and physiotherapy will not attract a Medicare rebate.