Ms Macklin, during her speech on the Matter of Public Importance this afternoon, said that the Commonwealth would only have to pay an extra $830 million over five years as compensation to the States for a decline in private health coverage from 30.3% today to just on 20% in five years time if the 30% rebate is blocked in the Senate.

Ms Macklin is dead wrong.

Under the Health Care Agreements the $83 million compensation for each 1% drop in private health insurance coverage becomes part of the base funding.

It is not paid just once, it is paid each and every year.

If the Senate blocks the rebate and coverage returns to a 2% decline per annum, then the cost to the Commonwealth is $166 million in the first year, $332 million in the second year, $500 million in the third year, $666 million in the fourth year and $832 million in the fifth year of the Agreements.

The five-year additional spending will be $2,496 million - not $830 million as claimed by Ms Macklin.

Now she either doesn't understand the Health Care Agreements, or she would short-change the States by more than $1.6 billion.

That's exactly what Labor did in its last Medicare Agreements, which failed to compensate the States for the extra demand on public hospitals due to the 2% a year decline in private health insurance.

Ms Macklin might also be interested to learn that at 20% coverage at the end of the current agreements, the starting point for the 2003-2008 Agreements would be an extra $5 billion in real spending just as compensation for the decline in private health insurance coverage - before any adjustments for population growth, utilisation, technology and other cost drivers.

Media Contact:
Bill Royce, Dr Wooldridge's office, (02) 6277 7220 or 0412 137 699