| Publication: | The Sydney Morning Herald |
|---|---|
| Date: | 15 May 2009 |
| Section: | National |
Mark Metherell | May 15, 2009
HEALTH fund members are likely to dump extras cover for dental and other ancillary care as a result of the budget changes this week.
The means-testing of the health insurance rebate is expected to lead to a greater exodus of members from extra cover because the Medicare levy surcharge, which discourages people from dropping their hospital insurance, does not apply to extras or ancillaries cover.
The budget papers forecast a minimal drop-out from hospitals insurance caused by new means-testing of the health insurance rebate even though it will add hundreds of dollars to premium costs for higher income people. This is because of the Medicare surcharge, the Government argues.
The levy of up to 1.5 per cent imposed on people on higher incomes who do not have insurance will cost people more than the expense of paying their insurance premiums.
The chief executive of the Australian Health Insurance Association, Michael Armitage, said the wrinkle in the means test changes would generate what seemed to be an unintended consequence and could mean a "large fallout", generating yet more demand for the struggling public dental services.
"If it is an intended consequence, how bizarre is that?" Dr Armitage said.
A spokeswoman for Nicola Roxon, the Health Minister, said the Government expected "the vast majority" would continue their insurance, including their ancillary cover.
"It is important to remember that the last time a scare campaign was mounted about a mass exodus from private health insurance as a result of the Government changes, the community proved them wrong and there was actually an increase in membership numbers," the spokeswoman said. Last year ancillary insurance paid out $2.7 billion in benefits with about half going to dentists and significant amounts also going to optometrists and physiotherapists.
The budget strategy of redistributing health costs away from the better-off could also hit new mothers with extra bills of $550 in obstetrics fees as a result of the new cap on the Medicare safety net.
An obstetrics leader, Dr Andrew Pesce, warned yesterday that obstetricians would not necessarily lower their fees in line with the budget measure to cap Medicare safety net refunds for high-end fees charged by obstetricians and other specialists.
Carol Bennett, the executive director of the Consumers' Health Forum, said she expected doctors to reduce their fees to ensure patients were not saddled with the added costs.
"That is absolutely reasonable," Ms Bennett said. She cited the huge rises of up to 267 per cent over five years in fees for areas like obstetrics.
A survey taken last weekend before the budget by consultants Leading Edge found that nearly 42 per cent of couples and families earning more than $100,000 said they would downgrade or cancel their insurance if the rebate was scrapped.
