Labor's plans to cut Australia's private health insurance rebate system by $700 million during the next four years just got one step closer to becoming a reality.
The private health insurance rebate is a government-funded initiative that helps Australians cover health insurance payments.
According to the Financial Review, the Coalition has decided to withdraw its opposition to Labor's proposed reduction of the benefit scheme – a reduction that will make Australian health insurance all the more costly.
Both moves have been made to help finance the national disability insurance scheme (NDIS), which is set to begin rolling out in July.
Opposition health spokesman Peter Dutton reportedly fought the decision to the bitter end, but he was unable to change his shadow cabinet colleagues' minds.
Since July last year, the private health insurance rebate system has been income-tested.
Most people with private health insurance policies are eligible for rebates of anything between ten and 30 per cent, depending on which income bracket they fall into.
Under the new rules, this rebate will be based on whichever is lower out of the consumer price index or the annual premium increase charged by insurers, states the Financial Review.
Tony Abbott told The Australian that the Coalition did not wish to cut the private health insurance rebate, as it genuinely supports the country's private health insurance system.
However, the NDIS was and continues to be in dire need of funding, with Mr Abbott describing the scheme as a "budget emergency".
The proposed changes to the private health insurance rebate system are set to be effective from the beginning of April next year.