FED: 23,000 drop out of private health cover in Dec qtr

AAP General News (Australia)
02-19-1999
FED: 23,000 drop out of private health cover in Dec qtr

CANBERRA, Feb 19 AAP - Private health insurance membership continued to wane in the three
months to December as 23,000 people dropped out of private cover, the Private Health Insurance
Administration Council said today.

The council said the total number of memberships fell to 5.676 million people from 5.699
million recorded for the September quarter.

The percentage of the population covered by insurance fell to 30.1 per cent from 30.3 per
cent.

Private health insurance coverage as a percentage of the population has fallen steadily
from 50 per cent in 1984 to its lowest level on record in the 1998 fourth quarter.

But the federal government played down the fall.

Health Minister Michael Wooldridge said it did not yet reflect the government's 30 per cent
health insurance rebate, which began on January 1 this year.

"The full effect of the 30 per cent rebate will not be able to be fully assessed for at
least 12 months," he added.

The Australian Health Insurance Association agreed the slight fall validated the decision
to provide the health insurance rebate.

"Health funds have been reporting significant take-up of private health insurance from
January 1, 1999," chief executive Russell Schneider said.

"No doubt the small decline in the December quarter 1998 was at least in part attributable
to people keeping their insurance in anticipation of the rebate's introduction from the
beginning of this year."

He said he expected membership growth would be reflected in the March 1999 quarter figures,
although the full impact would not be visible for a year.

But opposition health spokeswoman Jenny Macklin said the fact that 23,000 people dropped
their membership highlighted the underlying weakness of private health insurance as a product
in Australia.

"The government has put the private health insurance industry on life support and the
patient is unfortunately not doing well," she said in a statement.

"The inability of the private sector to control costs and eliminate gap payments are the
factors that continue to turn Australians off private health insurance."

She said the figures revealed that 96 per cent of people leaving the funds were aged under
65, and that 200,000 people downgraded their insurance to take on a policy with an excess
during the year.

AAP ear/cfm/de

KEYWORD: INSURANCE (CARRIED EARLIER)

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