HEALTH fund members are facing a painful double whammy when their premiums rise in April because the government rebate which helps with the cost will drop in value.
An analysis by News Corporation shows the 30 per cent private insurance tax rebate is now only worth around 27 per cent of a typical family’s premiums.
And the cut will cost families $120 a year.
Health fund premiums are tipped to rise by 6.5 per cent, almost three times the inflation rate or around $325 a year on a comprehensive family package.
The government provides a 30 per cent rebate to help families with the cost of their health fund premiums.
However, under a sneaky budget cut by the previous Labor Government the rebate now only increases by the inflation rate.
This means while health fund premiums will rise by around 6.5 per cent in April the rebate will rise by only 1.7 per cent.
The policy began to erode the value of the rebate last year and means the 30 per cent health fund rebate will from April only cover around 27 per cent of health fund premiums.
The impact of the lower value rebate will add $120 a year to the typical premium a family has to pay from April 1.
The measure, expected to save the government $700 million over a three years was introduced by Labor to rein in the $5.5 billion cost of the rebate which was the fastest growing part of the health budget.
The Abbott government pledged to reverse Labor’s cuts to the rebate but said it must wait until the nation’s finances could afford the change.
Health Minister Sussan Ley said a decision had not been made yet on private health insurance premium increases.
However, Ms Ley reiterated it was the previous Labor Government who cut ties between premium increases and government rebate for private health insurance and the Government remained committed to restoring the Private Health Insurance Rebate as soon as “we responsibly can”.
“It was Labor who cut spending on the private health insurance rebate to try and plug gaps in their budget black holes and unfortunately at this time Labor’s budget mess still remains a significant problem,” Ms Ley said.
“As always, the best thing people can do when it comes to private health insurance policies is shop around to ensure they get the best deal.”
Opposition health spokeswoman Catherine King said the Abbott Government and former Health Minister Peter Dutton approved the largest increase in private health premiums in a decade last year.
However, she defended Labor’s cuts to the rebate describing them as “responsible measures to ensure health funding remained sustainable”.
“The blame for this lies totally with Tony Abbott who approved the biggest rise in health premiums in a decade and is determined to hit patients with a GP Tax,” she said.
Consumers can compare the coverage and costs of individual hospital and extras insurance products at http://health.gov.au/internet/main/publishing.nsf/Content/privatehealth-average-premium-round