Posted on Feb 22, 2010 by Sergio Ulloa
The federal government is trying to rally support behind a bill in the Australian Senate which would impact private medical insurance rebates for some Australians.
The proposal seeks to rule out a 30% rebate on private medical insurance policies for any individuals earning over AUD$75,000 and families earning over AUD$150,000 annually. The Treasurer for the Labor government is saying this measure could save AUD$2 billion (US$1.78 billion) in the next four years and AUD$9 billion (US$8.1 billion) in the next decade.
The opposition is, of course, opposed; fearing that any costs saved by adding a means test to the rebate would be passed onto consumers either through higher private insurance premiums or longer public hospital waiting lists if people drop their private health insurance cover.
The Treasurer has said that the Medicare Levy Surcharge
will serve as an incentive for people with high incomes to not drop their private health insurance. The Medicare Levy Surcharge adds an additional tax of 1.0% of taxable income for individuals earning AUD$73,000 and families earning AUD$146,000 who do not have private health insurance coverage. This is on top of the Medicare Levy
which is 1.5% of taxable income, payable by all resident taxpayers.