SYDNEY—Predictions that changing the Medicare levy surcharge threshold will create an exodus from private health insurance are exaggerated, a private hospitals group says.
Treasurer Wayne Swan yesterday confirmed the Federal Government would double the surcharge threshold for singles from $50,000 to $100,000, while the threshold for couples would rise from $100,000 to $150,000.
The budget changes will exempt up to two million people from the levy surcharge of at least $600.
The thresholds have remained unchanged since the Howard Government introduced them in 1997 to encourage more people to take out private health insurance.
The Australian Medical Association (AMA) and private health insurers have both condemned the change, saying it will cause a stampede out of private health cover, leading to longer public waiting lists and premium increases.
But the Australian Private Hospitals Association (APHA) today dismissed the grim predictions, saying the quality of care provided by private hospitals would continue to attract patients.
"Australians understand the value of choice, quality and fast access provided by the private health sector," APHA executive director Michael Roff said.
"We believe that despite the changes announced in the budget, when people sit down and evaluate the value proposition, they will decide the benefits provided by private health care outweigh any small financial saving that may accrue.
"That is why we have seen health insurance membership growing strongly in the past few years."
However, Mr Roff warned private insurance holders that if they dropped out of the system they would have to pay more to rejoin in the future - and could get stuck on long public waiting lists.
"With the Lifetime Health Cover policy, if people who are currently covered opt out now, they will have to pay an additional loading if they decide to rejoin down the track," he said.
"People also need to consider if they want to risk the `waiting list lottery' that still exists in public hospitals."
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