Larvatus Prodeo

Among the many bills the Coalition are committed to opposing in the new Senate is the legislation to change the threshold where a higher level of Medicare levy cuts in for those who don’t have private hospital insurance from 50k to 100k. The bill, introduced in May, was referred to the Senate Economics Committee which held extensive hearings and took submissions. The report [link to pdf] is out in time for the Senate’s spring sitting.

The majority report from the Labor Senators is careful to quote several comments from Peter Costello in his second reading speech back in 1996 and the explanatory memorandum in order to demonstrate that its stated purpose was to provide an incentive only to higher income earners. However, the grounds for defending the levy have shifted, reflecting over a decade of Howard era support for the private health industry. We’re now told that it would have a catastrophic impact on health funds. These concerns are largely dispelled by evidence from health policy experts and health economists cited in the report. There’s scepticism that the much heralded exodus from private health will actually take place, for two reasons – that the life time cover provisions are likely to provide the stronger disincentive, and that those who actually value private health won’t leave. In addition, the best estimate is that the costs to the public sector would be around 1.6% of inpatient expenditure, an increase relatively easy to absorb.

Continue reading ‘Senate Economics Committee reports on Medicare Levy Surcharge Bills’