Failure of 30% rebate to lure members

Figures show that the 30% rebate scheme, which costs the Federal Government over $2 billion a year, only encouraged an additional 2 per cent of Australians to take out private health insurance.

However, Lifetime Health Cover, which penalises those people who take out private health cover later in life, had quite a substantial impact on the number of Australians with health cover. Almost 45 per cent of Australians have private hospital cover, an increase of almost 13 per cent from the March quarter prior to the introduction of Lifetime Health Cover. The Lifetime Health Cover scheme doesn’t cost the government anything.

Although the 30% rebate scheme has not been very successful in luring people to take out private health cover, the removal of the rebate could have a much bigger negative impact than it had a positive one. Prior to the introduction of the scheme, a different incentive scheme was in place. The Private Health Insurance Incentives Scheme applied only to lower income earners while all Australians can benefit from a 30% rebate off their health premium.

A spokesperson for the Minister for Health said the government is still firmly committed to the 30% rebate scheme.

The Sydney Morning Herald, p3, 17/1/02