Insurance rebate would hit $100m - NZ First

Last updated 11:30 01/03/2013

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New Zealand First believes its health insurance premium rebate plan will result in tax rebates of about $100 million.

But MP Andrew Williams, who presented the Affordable Healthcare private member's bill to Parliament, said the policy would end up being fiscally neutral as there would be a reduction in state healthcare spending as people's insurers paid for more elective surgery.

The bill, if it became law, would result in a 25 per cent health insurance rebate for people aged more than 65 who held a SuperGold card, and would also see the removal of fringe benefit tax from health insurance premiums paid for by employers.

It was welcomed by both the not-for-profit insurer Southern Cross as well as the Health Funds Association of New Zealand (HFA).

Williams said research conducted by NZ First in conjunction with the association had estimated that each of the two measures would result in tax rebates of about $50m.

But he said that without it more people would cancel their insurance because of continual premiums rises, driven by a combination of increasing claims and rising surgery costs.

That would result in increasing pressure on the Government health budget as people fell back on the state sector for things like knee and hip operations.

HFA chief executive Roger Styles said there was some disagreement on the net cost to the state, and in the past the Ministry of Health had indicated the reduction in state healthcare spending would be less than insurers predicted.

Styles said that if there was further money to be spent on healthcare, the Ministry seemed to be of the view that it would be the best-placed to spend it.

Williams said the policy would figure highly in negotiations, if NZ First was in a position to help form a government after the next election.

The focus, he said, would be on beefing up the entitlements to discounts available to SuperGold card holders.

The party has traditionally relied heavily on the votes of older New Zealanders, and other policies that would figure highly in its negotiations would be winter electricity discounts for cardholders.

Williams said the idea for the health insurance rebate policy came out of his campaigning before the last election.

"When I went out canvassing I had people coming up to me asking 'What are you going to do about health insurance because we can't afford to keep it going?"'

Styles said the policy would, if enacted, support the state health sector, and would bring some balance back to the sources of funding for healthcare.

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"The industry has been concerned about the impact - particularly on employers and the elderly - of medical health inflation, so measures that go some way towards addressing this and helping more people access or maintain health insurance are welcome," he said.

- BusinessDay.co.nz

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