Hard medicine to take
MORE than a million Australians are paying up to $3000 extra for private health insurance as a result of government means tests, age penalties and subsidy cuts.
Government health insurance penalties are more than doubling the cost of health cover for some at a time when rising premiums are forcing people to drop their insurance.
For some people these penalties are pushing their health insurance costs up from around $3000 to over $6100.
An investigation into the efhealth fect of government health insurance penalties has found tens of thousands of Australians lost access to some or all of the 25 per cent private 2018 COMMONWEALTH GAMES HOST CITY insurance tax rebate under a means test introduced in 2012.
As a result they are paying up to $1077 a year more for their cover.
If they also delayed taking out their health insurance until late in life they could be paying a government Lifetime Health Cover (LHC) penalty worth up to 70 per cent, or $2100.
More than one million Australians are paying this LHC penalty that increases the price of insurance by 2 per cent for every year they delayed taking out cover after they turned 30.
The federal government has also cut the subsidy it provides for health insurance from 30 per cent to 25 per cent adding a further $166 to the cost of health insurance by indexing it at a rate lower than premium rises.
A Spokeswoman for iSelect Laura Crowden said one in four iSelect customers aged 31 were paying a LHC penalty that was adding an average 29 per cent to their hospital cover premiums, she said.
“There are more than 130,000 Australians aged over 55 currently paying an LHC loading of at least 50 per cent,” Ms Crowden said.
“Over 10 years, a 50 per cent loading could result in an average iSelect customer paying an extra $15,000 more for their policy.”
Private Healthcare Australia chief Rachel David said at a time when wages growth remained flat the rising cost of these penalties was making it harder for people to afford health insurance.
Health funds are asking the government to reconsider the age at which the LHC penalty started and to provide a discount premium for younger people who took out health cover.