Pain for insurers but it won't kill them

Siobhain Ryan, Analysis

Article excerpt:

PRIVATE health insurance is at a tipping point, fund membership at risk of reversing this year for the first time since 2006. That's the bad news. The good news is the decline should be smaller and slower than the Opposition has warned. 

Budget cuts won't help the sector, but are less damaging than last year's increases to the Medicare levy surcharge threshold. The Government gave 250,000 Australians a reason to drop or avoid hospital cover by removing the tax penalty faced by non-insured singles and couples earning up to $70,000 and $140,000 a year respectively. 

This year, the Government announced cuts to the private health insurance rebate that will affect eight times the number of fund members, but should see far fewer abandon the sector.

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