Predictions about private health insurance 'alarmist'
21 05 08 - 11:20
A healthcare industry analyst says some of the predictions made over the future of private health insurance could be considered alarmist.
A report commissioned by the Australian Medical Association (AMA) says the Federal Government's plan to increase the Medicare surcharge threshold will fuel a cycle of unaffordable private health insurance.
But a health actuary with Deloitte, Stuart Rodger, says the fall out from the decision depends on how people aged over 30 respond to the changes.
He says people who are aged 30 and over should consider the costs of leaving the private system and rejoining later on.
"I think that provided that people make sensible decisions, some of the more alarmist statements about the serious threat to the industry and so on made by the AMA's press release, they're probably a bit too alarmist," he said.
He says people under 30 will have little incentive to keep private insurance, but it is a different story for those who are older.
"There's a lot of scare stories around about hundreds and hundreds of thousands of people leaving," he said.
"I think the real issue for consumers to think about is if you're over 30 and you leave the system and then you want to get back into it, you're going to be hit with a penalty that's going to last for a long time.
"You really should be thinking twice about leaving the system."
The Government has increased the threshold to $100,000 before people have to either pay more tax or take out private health insurance, saying it is effectively a tax cut.
But Opposition treasury spokesman Malcolm Turnbull says the change was the most misguided decision in last week's Federal Budget.
At a speech to the National Press Club, Mr Turnbull hit out at the change, calling it "probably the most ideological, most misguided, but most revealing element in the Budget - an assault on self reliance".