MEDIA RELEASE

Figures Back Government PHI Program

Today’s official figures confirming an unprecedented growth in the number of Australians with private health insurance shows the resounding success of the Federal Government’s incentives package, the Chief Executive of the Australian Health Insurance Association, Russell Schneider, said today.

The combination of the Government’s 30-percent rebate on contributions and the overwhelming response to the introduction of Lifetime Health Cover has brought the total number of Australians covered by private health insurance at June 30 to 7.9 million - a fantastic result by any measure.

This is equivalent to the numbers covered in 1987 and represents a marked turn around on the previous decline which had taken place from the introduction of Medicare until the introduction of positive incentives including the 30-percent rebate and Lifetime Health Cover.

In less than 18 months the Government action had increased the number of Australians able to use private health care by 2.2 million.

This would progressively translate into reduced pressure on the public hospital system and was a total vindication of the Government’s policies.

Mr Schneider said the figures confirmed Lifetime Health Cover had achieved an unprecedented stimulus to membership take up: more than 1.7 million people had taken out private health insurance in the June quarter with the obvious intention of "locking in" to the benefits of Lifetime Health Cover.

Many more people had taken advantage of the two week amnesty extension - to July 15. As a result the September quarter figures could be expected to show an even higher number covered.

It should also be noted that if the Government had not acted to encourage more private health insurance take-up and pre-incentive levels continued only 4.5 million people - or 23 percent of the population would have been insured by the end of this year. This would have placed unbearable pressure on the public hospital system.

Private health insurance levels reached a low of 5.7 million people at the end of December 1998. In January 1999 the Government’s decision to allow taxpayers to apply the 30-percent rebate directly to premiums came into effect, immediately reducing the price to contributors to private health insurance by almost a third.

Membership levels grew each quarter from there on - in marked contrast to the trends of the 1980’s and early 1990’s.

Mr Schneider said the vastly expanded private health insurance coverage was a tribute to the persistence of Health Minister Michael Wooldridge and the Prime Minister, Mr Howard.

The increase in membership would provide a "win/win" result for the whole health care system and reduce the pressures on Medicare as newly insured people - and those now able to keep their cover - were able to choose private treatment if they became ill.

The latest result reduced potential pressure on public hospitals by more than 3.1 million people compared with the pre incentive trend , Mr Schneider said, and this would progressively be reflected in more use of private hospitals or more people electing to be private patients in public hospitals.

The boost in insured numbers - restoring more balance within the insured community between healthier and sick people - would lead to long term premium stability.

Canberra – Monday 14 August 2000

For further information contact Russell Schneider via the AHIA National Secretariat at telephone 02 6285 2977 or after hours on02 6288 2145.