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Means-test could lead to drop in Medibank membership

19 October 2011 - 2:42pm

Medibank Private is anticipating a drop in membership if the proposed health insurance means-testing is approved.

The government-owned private health insurance company estimates 2.5 per cent of its members will downgrade their cover if the Labor Party's plan is successful.

Appearing at the Senate's Finance and Public Administration Committee hearing yesterday, Medibank Private chief George Savvides revealed upcoming membership forecasts, which also included the potential for 15,000 policy holders - or 0.375 per cent of its membership - to get rid of their private health cover altogether.

The prediction from Medibank is slightly higher than that made by the government upon presenting the bill in parliament.

The bill has already been rejected twice by the Senate, however if passed, will affect individuals earning more than $80,000 a year, as well as families earning over $160,000 a year.

Mr Savvides noted that it was essential for high income earners to realise that they would be faced with a higher tax penalty at the end of the financial year for not having health cover than they would face being means tested.

Customers looking for a more affordable option may wish to utilise the services of a health insurance broker, who may offer a personal assessment and provide information on the right private health cover plan.