If spent on public hospitals, it would buy 7000 more acute care hosptial beds per year, or alternatively, it could more than double all the community health and support services that we now have. The rebate is a windfall gain for those with private insurance - a gift largely from people on low incomes to those on high incomes. It will fail to induce more people to take out private insurance, as the present subsidies have failed. This is because private insurance is expensive. High costs are what private providers want.
High costs mean high incomes and high profits for private practice doctors and private hospitals.
As costs spiral, the only way that a government will be able to keep people in private health insurance is to offer gifts of ever increasing sums of taxpayers' money. As the Government's own Productivity Commission found, privately insured people having emergency care or complex operations which may involve high copayments, still use the public system as public patients. The private sector already benefits enormously from the public sector and would not be viable without it. WEL asks both Coalition and Labor parties to review this inappropriate decision.