Insurance Gaffe Leaves Pm Shaking His Head
Sydney Morning Herald
Friday February 8, 2002
The Prime Minister yesterday jumped on speculation of changes to the health insurance rebate after a loose comment by his new Health Minister.
With the Government's health insurance policy under fire because of moves for big premium rises by at least two health funds, the Health Minister, Kay Patterson, had earlier left open the possibility of reviewing the rebate in relation to extras such as dental and physiotherapy services.
The $2 billion tax incentive for those with health insurance is set to cost taxpayers many millions of dollars more as a result of probable rises in premiums.
On the ABC's AM program, Senator Patterson was asked to rule out cutting the rebate for premiums for extras cover.
``I need to look at the rebate all the time. We need to ensure as I said that the premiums are as low as possible," she said.
Asked in Jakarta about the suggestion, Mr Howard said he could not believe the minister would have hinted at such a move. ``I can't believe she would have left that hanging," he said. ``Look, there's been no change to the amplitude of the cover."
The Treasurer, Peter Costello, said he could not imagine the Government allowing the full 13 per cent rise reportedly sought by Medibank Private. He said ``there might be a case for CPI-type increases", which would give the fund about 3.1 per cent for the past year, although Medibank has not had a rise for three years.
Senator Patterson's spokesman denied she had given the impression of a review of the rebate. He said she meant the Government would monitor the health funds' costs to ensure taxpayers were getting value for money out of the rebate.
She said on radio the Government had ``a vested interest" in ensuring premiums were as low as possible, because it bore 30 per cent of any rise in premiums.
``We can't expect premiums not to rise," she said. There had been a reduction in interest rates, affecting funds' investment income and rises in nurses' salaries.
Senator Patterson said although the Government would want to keep premiums as low as possible, it also had to ensure funds had adequate reserves to meet their obligations.
The Opposition health spokesman, Stephen Smith, yesterday left open Labor cutting extras from the rebate, putting himself at odds with his leader. Earlier this week Simon Crean said Labor would not be changing its election commitment to the rebate. But Mr Smith said the party would consider suggestions for change to the rebate in its policy review.
The chief executive of Catholic Health Australia, Francis Sullivan, yesterday called for the Government to remove the rebate from extras.
The original object of the rebate was to shift demand for hospital beds from public to private, but $300 million a year of the rebate went to extras cover, which had nothing to do with hospital beds.
Mr Sullivan said the $300 million should instead go to the care of the aged and the mentally ill, two areas in need.
© 2002 Sydney Morning Herald
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