Government ‘won’t horse-trade’ on health reform



THE Greens today are standing in the way of legislation to cut billions in private health insurance rebates which the Government hopes will put the Budget back into the black.


The Government calculates the income-based reduction of the rebate would save $2.4 billion over three years, a spending cut crucial to its bid to put the Budget into surplus in 2012-13.

But the price of Greens support could be creation of a Medicare dental scheme, which might cost more than the Government hopes to recover from the insurance rebate cuts.

They want the bill split to hive off provisions for penalties of up to 1.5 per cent of income for not taking out private cover.

“We are pushing people away from the public system and into the private system and turning Medicare from a universal entitlement into a bare minimum safety net,” Greens MP Adam Bandt said today.

Health Minister Tanya Plibersek pointed to some concessions on dental care but rejected the Greens’ full demands, saying, “we cannot make this policy on the run”.

“What we’re not going to start doing is horse-trading on this legislation,” Ms Plibersek told ABC radio.

The Government is warning that as many as 110,000 people will drop private insurance complete under the Green demands, worsening the burden on public facilities.

Negotiations intensified today with the scheduled introduction of the legislation by Health Minister Plibersek, but a vote is not expected until next week at the earliest.

Minister Plibersek has also had to start fresh negotiations with cross-bench MPs to ensure the Government has the extra three votes the Government needs to get the bill through the House of Representatives.

The rebate removal would affect just 10 per cent of Australians and nearly eight million people will not be affected, the Government has calculated. But the money saved would be vital to its Budget planning.

The bill would not touch the rebate of 30 per cent of private health insurance premiums paid by individuals earning $83,000 a year or less, and families on $166,000 or less.

The rebate would be reduced to those on $83,000 to $96,000 a year, and families on $166,000 to $192,000.

It would be withdrawn completely from those earning more than $129,000 a year and families on more than $258,000.

There would be concessions for older insurers, who have a high demand for hospital services. For example, those in the lowest pay tier would get a 35 per cent rebate if aged 65 yo 69, and 40 per cent if aged 70 or above.

The legislation also includes $165 million in penalties for taxpayers who do not take out private coverage, and the Greens are opposed to these penalties, arguing health insurance should not be compulsory and public hospitals should be available to all.

The penalty, the Medicare levy surcharge, would be one percent for individuals on between $83,000 and $96,000; 1.25 per cent from $96,000 to $129,000, and 1.5 per cent for higher earners.

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