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Cuts to rebate needed as insurance popularity rises

18 November 2011 - 2:42pm

The Gillard government is being encouraged to address the increasing cost of the private health insurance rebate.

Private Health Insurance Administration Council (PHIAC) data for the September quarter released earlier this week (November 16) indicated that the percentage of Australians covered by a policy is the highest it has been in 35 years.

Despite almost 53 per cent of the population now being covered by private health cover, industry sources expect premiums to be raised by approximately 5.5 per cent next year, in response to growing hospital costs and increasing access to resources by the ageing of the population.

The cost to the taxpayer of the health fund rebate is expected to pass $5 billion next year.

Plans currently circulating in federal parliament suggest phasing out the 30 per cent rebate for singles earning more than $80,000 and for couples earning more than $160,000.

''Now is a good time to do it, and that money could actually be much more effectively spent for the benefit of the whole population,'' health minister Nicola Roxon said yesterday (November 17).

Those looking to obtain or compare health insurance options may benefit from the service of a broker, who can who can help to find the most appropriate plan based on an individuals circumstances.

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