The federal government has successfully passed legislation that will allow the 30 per cent private health insurance rebate currently offered to Australians to be means tested.
One month after gaining the approval of the House of Representatives, the upper house passed the Fairer Private Health Insurance Incentives Bill and two related bills last night (March 15) without any amendments.
Prior to the final vote, independent senator Nick Xenophon unsuccessfully proposed an amendment to independently monitor the number of Australians who reduce or remove their private cover as a result of means-testing.
"It is vital that we know from an independent source just how many people drop out of private health insurance or reduce their cover as a result of means-testing the 30 per cent rebate," he said.
"It is almost a rule of public policy that there will always be unintended consequences."
According to the opposition, the changes will result in 1.6 million Australians dropping their private hospital cover over the next five years – significantly higher than the Treasury's suggestion of 27,000.
The reform will take effect from July 1 and is expected to save the government $2.4 billion over the next three years.