Medicare relief or pain?

May 10, 2008, 4:32pm,  144 views

I find it hard to understand the logic of doubling the income threshold at which the Medicare surcharge kicks in.

The budget leak announcement will almost certainly place extra strain on the struggling public health system.

Families without private cover will avoid paying the one percent Medicare levy surcharge where combined income is less than $150,000, up from $100,000 — a saving of up to $1500.

The threshold for singles will raise from $50,000 to $100,000.

Uninsured young adults will gain most from the policy. It is also likely to also encourage under 30s who are insured to drop their cover until age-based health insurance penalties come into effect when they turn 31.

I have private health insurance, although frankly it’s a cost I’d prefer to do without. With kids though, we get some value on the extras, especially dental, and my wife uses the full chiropractic allowance.

I can’t really see the policy benefit in assisting high-earning young single people to avoid getting private health insurance.

Let’s be clear: the proposed change won’t make any difference for low-income earners. This is about providing a cash boost for wealthy young people and affluent families. But at what expense?

Opposition leader Brendan Nelson has described the reforms as a cruel “con”.

“There is absolutely no doubt that as a result of this fewer people will take up private health insurance,” Dr Nelson said today.

“Less money will be coming in through the Medicare levy and we’ll have longer waiting lists and even poorer conditions in public hospitals.”

In a budget move I do support, thousands of parents who care round-the-clock for disabled children will win access to the carer payment for the first time, under changes to eligibility rules.

Twice as many parents are tipped to become eligible for the fortnightly payment of $564.80 for singles or $913.60 per couple.