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Senate debates Medicare Ley Surcharge « Previous | |Next »
September 18, 2008

The ALP's Medicare Ley Surcharge threshold bill is in trouble in the Senate The Rudd Government wants to raise the income thresholds determining liability for the 1 per cent surcharge from $50,000 to $100,000 for singles and from $100, 000 to $150,000 for couples. Both Xenophon and Fielding are saying 'hang on a mo' folks, not so fast.

Nick Xenophon said he would block the bill on the grounds that the increase would likely lead to an exodus of members from the private health funds, increase pressure on public hospitals, and lead to higher premiums for those who retained private health insurance. His position is that he wants the government to index the income threshold of its original base, which means that the surcharge kicks in at $67,000 for singles and $134,000 for couples. Grounds for negotiation one would think.

Steve Fielding had similar concerns about an exodus from private cover and rising premiums for those who remained. He said that his support for the bill was contingent on the government agreeing to raise the private insurance rebate by 5% to help lower income income earners who might face higher premiums. He made no mention of what constitutes low income.

Compromise is clearly needed. The Rudd Government is showing little inclination to negotiate as it spends lots of its energy attacking the Liberals for not supporting its measures in the Senate. Why bother? The Liberals have clearly said they strongly stand behind private health insurance and oppose its undermining. That means negotiating with Xenophon, Fielding and the Greens on the narrow issues of threshold.

The ALP's cost saving rhetoric is a furphy. The real issue is the ALP shifting the emphasis from private to public health and spending lots more money on public health care.Their best line of attack is to point out the hypocrisy of the free market Liberals in providing public subsidy for private health insurance industry when they oppose it for the manufacturing industry to prevent it from going offshore.

The private health funds need to lift their game in terms of product. After all, their commitment to the free market and the disciplining effects competition means they stand or fall on meeting the demand for private health care with good product. What they offer can be improved. Good product would help prevent the exodus from private health insurance.

| Posted by Gary Sauer-Thompson at 6:50 AM | | Comments (2)
Comments

Comments

Why don't they negotiate rather than rave on about destroying the budget surplus. What is all the argy bargy about the public dental scheme about? Why are they arguing about that when it is so desperately needed.

Nan,
the ALP is negotiating with the balance of power Senators behind all the political rhetoric that you see in Question Time in the House of Representatives. The political rhetoric is designed to throw mud at the Liberals through performances in front of the TV cameras so the public gets the message that the Liberals are destroying the country. It's crude. How effective it is I have no idea.

The dental stuff seems to be an issue about the Coalition's dental scheme and the ALP's. The ALP want to scrap the former to pay for the latter. The former provides Medicare-funded dental services to people suffering an associated chronic illness. it costs $490 million over 4 years. The ALPs' plan which consists of two programs: a teen dental scheme over 5 years ($490m) and program to cut public waiting lists over three years ($290 million).

It's part of a broader argument over the budget. The Rudd government is arguing that the surplus should be maintained in its entirety and that blocking any revenue measures would put pressure on inflation. The Greens reject that argument.They say that the tax cuts worth $47 billion over 4 years indicate that there is enough money for both dental schemes.