Skip to content
29 July 2014
The Federal Government has been accused of cutting the private health cover rebate by linking rises to the consumer price index (CPI).
The Private Health Insurance Legislation Base Premium Bill was introduced to Parliament last week. It has now gone to a Senate standing committee, which will report on June 17.
The bill will significantly change the way the rebate works, Finity consultant Jamie Reid says.
“If premiums go up by about 6% a year, the rebate now will only increase by about 2%, meaning people will be considerably out of pocket.
“The legislation says it will apply only to the base premium, and not any incentive that was applied to encourage people to take out cover.
“The Government is not being transparent about what it’s doing.”
CPI-linked rebate rises will take effect from April 1 next year, according to an explanatory memo on the bill.
“If insurers decrease the premium they charge, the rebate will decrease commensurately,” the memo says. “The bill will reduce the level and rate of the Government’s rebate expenditure.”
The move will save $699.7 million over four years, according to the legislation.
But the total figure will be much higher, with budget papers referring to savings of $6.4 billion over 10 years, Mr Reid says.
“The Government is replacing the rebate by stealth. There has been no thought about how it will be implemented, because insurers will have to allocate the changes to each product.
“It all sounds easy in the legislation, but it isn’t.”
Insurers have different increases for different products, so the rebate will change in each case, Mr Reid says.
“This will be a headache for insurers,” he told Life+Health insuranceNEWS.com.au.
“They will have to prepare their systems to handle the different rebate increases, and then [need] a period of time to test the programs.
“Private health insurers will need time to prepare for this big change to the rebate process.”
28 July 2014
Exceptional opportunity to manage and grow the Townsville branch of this dynamic multinational brokerage with scope to gain equity!
28 July 2014
National loss adjusting firm is seeking an experienced Business Process Improvement Manager with a strong background in process improvement and the ability to deliver significant business results and improved productivity.
21 July 2014
Best AR structure in Australia! Become your own boss and build your broking business with extensive networks and ongoing support to ensure your success!
21 July 2014
This role has success written all over it for an experienced ambitious & driven underwriter ready to accelerate their career & drive their own success
16 July 2014
This exciting opportunity is responsible for management and further development of the recently launched Coles Life insurance portfolio, managing the partner relationship ensuring delivery of the customer experience and Coles brand promise.
11 July 2014
Dynamic insurance practice based in Mount Waverley is looking for a bright and skilful insurance professional to manage our growing domestic insurance portfolio and look after our clients. We are an authorised rep practice, not a broker model.