NSW private health changes to impact 47 federal seats, sparking wider campaign by industry

Federal Labor MPs are being warned about the full impact of the NSW government’s private health insurance changes affecting millions of Australians.

Dr Nick Coatsworth.

You can now listen to The Australian's articles. Give us your feedback.

You can now listen to The Australian's articles.

The 47 federal NSW MPs are being warned of a looming backlash from voters over state government plans to increase costs on private health insurers.

A Private Healthcare Australia analysis of NSW federal seats has broken down the regions with the most number of people affected by the planned NSW overhaul of its health insurance levy.

The NSW government last week introduced draft legislation to increase the Health Insurance Levy from $1.77 per week per person with health insurance to $3.27 per week per person.

The Australian has seen Private Healthcare Australia data showing the electorates that will be hardest hit, affecting an estimated four million people.

The NSW government has blasted the PHA, but the PHA says NSW is the only state that taxes health insurance.

If implemented, it would mean NSW voters would pay the highest health insurance costs in the country.

Federal NSW politicians have been warned of a backlash over the increases, which could lift premiums by about 4.5 per cent on average.

The seats analysis shows the increased levy could affect more than 120,000 people in nine seats – not all of whom would be voters – with more than $8m in extra costs.

This includes the key seats of Bennelong and Greenway.

Between 110,000 and 120,000 people in a further 14 seats would be affected, including in the Prime Minister’s seat of Grayndler and the teal-held seat of Wentworth.

A further 20 seats with 80,000 to 100,000 affected voters – most in Labor electorates – also would be affected, according to the data.

But the NSW government has blasted the insurers’ campaign, arguing they are reneging on their public hospital bills.

The government wants insurers to pay a higher rate when their customers get a private room in public hospitals.

“Premiums didn’t go down when the big insurers stopped paying their bills,’’ a government spokesman said.

“For every day private health insurers refuse to pay, public hospitals lose $383,561. We urge them to put patients and public hospitals before super profits and executive bonuses.

“Given their record profits, this is nothing but another scare campaign from the big four billion-dollar private insurance conglomerates.”

Nick Coatsworth, the Australian Patients Association ambassador, said people taking out insurance wanted to support the concept of choice to back a strong health system.

This took the pressure off public health.

He said it was a negative choice for the NSW government to take this route. “I’m surprised,’’ Dr Coatsworth said.

The PHA estimates the NSW strategy could cause about 75,200 people to drop their insurance. It argues this would put additional pressure on public hospitals and emergency departments across the state, and increase waiting times for elective surgery.

The row comes amid intense pressure on insurers and public and private health systems.

Private hospitals and medical ­device companies are ramping up pressure for reform to the way health insurance premiums are set – including an independent umpire to oversee the process – amid ongoing warnings the sector continues to face unsustainable challenges.

The Australian reported last week that key stakeholders have written to federal Health Minister Mark Butler calling for reforms to the health insurance premium round process.

The letter calls for an independent body “to oversee insurer behaviours that are threatening the viability of the system and the value of private health insurers for consumers”, a cap on capital requirements to compel insurers to free up “excessive reserves” of capital to support the struggling private system, and reform to incorporate the cost of delivering care in premium round processes.