The federal government is proposing changes to the rebate on private health insurance, which Private Healthcare Australia (PHA) says will mean millions of Australians will have to pay more for their private health cover or wait longer for care.
The changes which the government intends to implement are the removal of the rebate from the Lifetime Health Cover loading from July 1 2013 and adjustments to the rebate's indexation which will see the rebate reduce "relative to the premium you pay for your cover" from April 1 2014.
PHA stated that until recently everyone with private health insurance received the 30 per cent rebate to help make cover more affordable, but with the rebate becoming means-tested on July 1 2012, the eligibility for the rebate "now depends on what income you earn".
Singles that earn more than $84,001 and families that exceed $168,001 this financial year (2012-13) will have their rebate affected.
Under the new measures, the government will not pay a rebate on the Lifetime Health Cover (LHC) loading component of the premium anymore.
Lifetime Health Cover is a loading that is added on top of an individual's hospital premium at 2 per cent for every year that they are over the age of 30 when they take out hospital cover – reaching to a maximum of 70 per cent.
These new changes will affect all Australians, the PHA warns.
"If you are one of the 12.4 million Australians with private health insurance your cover will become less affordable, and over time, more people will depend on public hospitals for their treatment," the PHA stated on the YouShouldKnow private health information website.
"This will place enormous pressure on our public health system which everyone knows is already under strain."
Legislation has been introduced to the parliament by the federal government to remove the Lifetime Health Cover's rebate component, with PHA stating that they will "soon look to do the same" for changes to the indexation of the rebate.
The PHA has launched a campaign – Save Your Rebate – to stop the changes, by encouraging Australians to tell their federal MPs to vote against the proposed legislation.