Last night’s Federal Budget has confirmed the private health insurance regulator and ombudsman will disappear as part of the Federal Government’s move to reduce the number of government agencies.
Some of the Private Health Insurance Administration Council’s role will be merged into the Australian Competition and Consumer Commission and the remaining functions will go to the Australian Prudential Regulation Authority.
The Private Health Insurance Ombudsman will also disappear with its functions being merged into the Office of the Commonwealth Ombudsman.
There is no specific timing of when the moves will happen, other that they will be implemented in the next financial year.
The Government has also reaffirmed the sale of Medicare Private will occur during the next financial year.
Other health insurance measures in the Budget include not indexing the private health insurance rebate for the next three years.
Finity Consulting Principal Jamie Reid says the move will save the Government $1.5 billion over the next three years.
“This means more people will be pushed into the high-income tiers, and so get lower premium rebates,” he said. “While the Medicare levy surcharge (MLS) arrangements help to stop people dropping their cover, people dropping down a rebate tier will inevitably consider downgrading or shopping around for cheaper cover.”
The MLS currently applies penalties to singles earning more than $88,000 a year or families on more than $176.000.
“Not indexing these thresholds means more ‘mid-earners’ will have to insure or pay the penalty,” Mr Reid said. “If more people decide to insure, not indexing could be a positive for insurers.”
Treasurer Joe Hockey also announced last night that the Australian Securities and Investments Commission (ASIC) will lose its registry services.
The Government will undertake a scoping study in the 2015 financial year to look at future ownership or delivery arrangements for the services.
Possibly in anticipation of this revenue-generating move, funding for ASIC will be reduced by $120 million during the next five years.
Source: lifehealthinsurancenews.com.au