Means-Test is Historic Victory For Working Australians

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PDF printable version of Means-test is Historic Victory For Working Australians (PDF 21 KB)

15 February 2012

Health Minister Tanya Plibersek today said the passage of legislation to means-test the private health insurance rebate through the House of Representatives was a historic victory for working Australians.

“This is a landmark reform being brought about by a Labor government committed to improving the lives of working people and creating greater fairness for them and their families.”

“The legislation is a win for low and middle income earners, who for too long have been forced to subsidise the private health insurance of higher income earners through their taxes.”

Ms Plibersek said the legislation will save taxpayers $2.4 billion over the next three years – or $100 billion over the next 40 years. The private health insurance rebate is the fastest growing cost to the health budget.

“The Gillard Government is committed to strengthening our health system and making sure it provides the best possible health care to Australians, where they need it, when they need it.”

Ms Plibersek said the three Fairer Private Health Insurance Incentives bills passed the House of Representatives today with the support of the members for Lyne, Denison and Melbourne.

The Government has also committed to spending $165 million over three years, funded by an increase to the Medicare levy surcharge for higher income earners, contained in the legislation, on public dental services.

“The Gillard Government is committed to a establishing an improved dental scheme that is targeted at Australians who can least afford to pay for oral health care themselves.”

“This is another victory for working Australians some of whom have difficulty meeting the cost of going to the dentist and maintaining their oral health.”

The passage of the legislation through the House of Representatives comes as new figures issued today by the Private Health Insurance Administration Council (PHIAC) show that more Australians are covered by private hospital insurance now than at any other time in the past 36 years.

Ms Plibersek said since the Government took office, around one million people had taken out new hospital cover, raising the participation rate to 45.7%.

According to PHIAC in the December 2011 quarter the private health insurance industry reported a record profit of $461 million before tax. Profit before tax for the year to December 2011 was $1.27 billion.

Under the government’s legislation to means-test the rebate, in the next financial year, individuals earning $83,000 or less, or families earning $166,000 or less will not be affected at all by the changes.

As income increases, the taxpayer funded subsidy decreases, however only singles earning more than $129,000 a year and families earning $258,000 or more in the next financial year will lose the rebate entirely.

The legislation will now be considered by the Senate.

For more information, contact the Minister’s Office on 02 6277 7220

Private Health Insurance Tiers for 2012-13

	Unchanged	Tier 1	Tier 2	Tier 3
Singles	$83,000 or less	$83,001–96,000	$96,001-129,000	$129,001 or more
Families	$166,000 or less	$166,001-192,000	$192,001-258,000	$258,001 or more

Private Health Insurance Rebate

Medicare Levy Surcharge

	Unchanged	Tier 1	Tier 2	Tier 3
All ages	0.0%	1.0%	1.25%	1.5%