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Private health means testing commencement in doubt

21 November 2011 - 5:18pm

The federal government has one week left to pass legislation that would see the 30 per cent private health insurance rebate means tested.

This bill has twice been defeated in the senate, facing opposition from independents Bob Katter, Tony Windsor, Tony Crook and Rob Oakeshott.

A spokesperson for health minister Nicola Roxon's office indicated to The Australian that a compromise was unable to be negotiated with the independents, stating "it is highly unlikely it will come into the house this week".

According to News Limited reports, the Gillard government risks a $2.9 billion budget black hole if the rebate savings are not delivered.

Means testing the private health insurance rebate - worth $4.7 billion - would affect 2.4 million health fund members and was due to be implemented on January 1 2012.

The government is set to save $768 million nationally in 2012-13 and a delay in the commencement of the means test could cost the government up to $61 million per month, according to reports.

The means test would require private health funds to undertake major changes and determine which policy holders qualified to have their 30 per cent health fund rebate reduced or withdrawn.