2021-22 Federal Budget: Summary of Private Health Insurance Initiatives
On Tuesday 11 May, the Australian government announced their second federal budget since the Covid-19 pandemic began. With employment faring better than expected and confidence in our return to financial stability and sustainability, this budget focused on funding for tax cuts, women, aged care, childcare, mental health and businesses.
Overall, our economy has recovered strongly despite undergoing its first recession in almost 30 years. A large part of this success is due to the outcomes our world-leading health system has achieved in managing the spread of Covid-19, compared to most other countries.
Funding continues for our Covid-19 response, with an extra $1.9 billion to be spent on our vaccine strategy over the next 5 years and another $1.5 billion for Covid-related services such as testing and contact tracing.
The government announced $8.7 million over 4 years toward the following Private Health Insurance measures:
- Examining the effectiveness of the current regulatory settings in respect to the Medicare Levy Surcharge (MLS) and Private Health Insurance (PHI) Rebate
- Reviewing and enhancing the Private Health Insurance (PHI) Rebate model - to take the current modelling beyond tax-based drivers of participation in PHI, to incorporate other aspects of health policy that impact PHI, such as product value, the broader health system, public hospital and Medicare Benefits Schedule (MBS)
- Independently investigating private hospital default benefit arrangements
- Improving the certification process for admitting patients to hospital for procedures normally provided out of hospital.
The second and largest funding allocation of $22 million over 4 years has been made towards prosthesis reform, to reduce the cost of devices used in the private health sector and to streamline access to new medical devices. This is to be achieved by modernising and improving the Prosthesis List, to better align the price set for medical devices across private and public settings. This initiative will be implemented by the Department of Health in conjunction with the Independent Hospital Pricing Authority, and in consultation with key stakeholders.
More information on these initiatives can be found at health.gov.au
These new funding allocations join existing reforms that are in line to be passed by the Senate this year, such as increasing the age that dependants can remain on a family policy from 25 to 31 years and removing the age limit for dependants with a disability completely.
Sources:
https://www.abc.net.au/news/2021-05-11/federal-budget-2021-winners-and-losers/13328556
