National health fund provider Australian Unity has spoken out against the federal government's decision to means test the private health insurance rebate.
According to chief executive officer of healthcare Amanda Hagan, the effect of the legislation on lower income earners and those with a chronic disease has been underestimated.
"Australia Unity has argued that private health care remain fair for all and we are disappointed that despite our concerns, members of parliament have passed this legislation," she said (February 15).
"We will do our best to reduce the financial and administrative impact on our members over coming years, within the constraints that have been imposed on us by this policy change."
Ms Hagan believes that the community rating system that has helped to create a strong private health system is being compromised.
The Fairer Private Health Insurance Incentives Bill is expected to easily pass through the senate in the coming weeks, allowing the legislation to come into effect on July 1.
According to health minister Tanya Plibersek, the reform is expected to save the government $2.4 billion over the next three years and $100 billion by 2050.