Health Fund Membership Grows ‐ Can Treasury Forecasts be
Trusted?

18 May 2009

Data released by the Private Health Insurance Administration Council this weekend shows that private
health insurance coverage grew by 45,000 individuals over the first quarter of 2009. This means health
insurance membership has increased by 110,000 people since the Medicare Levy Surcharge (MLS)
changes were implemented last year.

This is despite modelling by Treasury that said private health insurance membership would decrease
by 492,000 by 30 June 2009. For the Treasury figures to prove correct, 600,000 people would have to
drop their cover between April and June.

“If Treasury modelling can be this wrong on the MLS measure, why should Australians trust their
current modelling regarding the proposed changes to the private health insurance rebates that were
announced in last week’s budget?” asked Michael Roff, CEO of the Australian Private Hospitals
Association.

“The MLS changes were simple compared to the complexity of the rebate proposals, which will
introduce 10 different levels of entitlement or surcharge depending on income level and age. Does
anyone trust the Government to be able to model this correctly? With the Medicare Levy Surcharge
changes, they got one figure wrong. With the proposed private health insurance rebate changes those
errors could potentially be 10 times as big.”

“The Government now needs to release the details of the Treasury modelling so it can be subjected to
independent, expert scrutiny.”

“Each quarter the number of Australians covered by private health insurance increases as the general
public gets more and more frustrated with the public health system. The Government should be
encouraging those who take responsibility for their own health care costs,” concluded Mr Roff.

For more information or to interview Michael Roff, contact: Lisa Ramshaw, APHA Public Affairs
Manager on 0413 971 999