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Means test for rebate conversation ignited

17 August 2011 - 1:26pm

Yesterday's release of statistics revealing the number of Australians that have private health cover have fuelled a government push for a means test on the health care rebate.

Health minister Nicola Roxon is expected to use the new figures - ten million and rising - as further justification to pass a bill concerning a means test for determining the health care rebate.

A bill which is currently before Parliament drafts a new plan for the 30 per cent rebate to be means-tested on a three tier system.

This is the third time the bill has been introduced - it has twice been passed by the Lower House, only to be blocked in the Senate on both occasions.

The treasury has estimated that should the means test be passed, singles earning over $124,000 (and families over $248,000) will be paying 43 per cent more for their private insurance.

It aims to even out the balance by eliminating the current system where lower income families end up subsidising wealthier ones.

By focusing on high income earners, the means test will have less of an effect on households with smaller earnings - many of whom have made the switch to private cover to avoid the Medicare Levy Surcharge.