Insurer calls for higher rebate

Medibank Private has called on the Federal Government to introduce a special rebate to help stop young people under 30 dropping their private health insurance. Research commissioned by Medibank predicts that private health cover will continue to increase by an average 5.5 per cent every year until 2012. But for every $1 spent on the Government's 30 per cent rebate, $2 is saved because patients are privately insured. The research also predicts that hospital-cover membership will fall to 37 per cent from 43 per cent by 2041, despite the government subsidy. The report calls for a larger rebate for the under 30s and says the young and well will drop out of private health cover if the existing rebate is abandoned. The private health insurance sector could collapse if the rebate and other incentives are dropped, the report warns. Coverage could fall to a low of 18 per cent by 2040.