Federal health minister Tanya Plibersek has suggested that the private health insurance industry is capable of surviving the industry reform introduced by the government last week.
Appearing on the ABC's political program Insiders (February 19), Ms Plibersek stated that private health insurance will remain profitable, despite the impact that means testing the 30 per cent rebate could have.
When questioned about the number of Australians that could potentially downgrade their cover due to the reform, Ms Plibersek asserted: "I think this is something that the private health insurers have been pushing as an argument. There's no evidence of that."
While the health minister outlined the treasury's expectations regarding the impact of the reform – up to 27,000 Australians could drop their private health insurance policy – Ms Plibersek compared this figure to the 50,000 people who joined the private system in the last quarter.
"And in the last quarter alone, the private health insurers made $461 million in profits."
"So the idea or the argument that they're struggling and that they're in trouble I think is not credible."
Ms Plibersek also confirmed her intent to keep premium increases to a minimum, with the minister set to deliver her final determinations in the coming months.