Catholic Health Australia has warned that tax changes raising the threshold of the health insurance tax penalty to $100,000 will force 200,000 people who dropped their health cover back on to public hospital waiting lists.
The Daily Telegraph reports the measure was meant to take effect from July 1 and result in about 485,000 people dumping their private health cover.
However, the Senate has yet to approve the changes.
According to the Telegraph, health fund members could end up worse off if they drop their health insurance in response to the loosening of a tax penalty forcing people into private cover.
Meanwhile the Australian Health Insurance Association has warned health fund members earning between $50,000 and $100,000 who drop their cover now may be forced to rejoin a health fund if the tax change is blocked.
And they will face the same waiting periods confronting new health fund members when they do.
Those who have quit for more than a month and then rejoin may have to wait 12 months before they can claim for hospital treatment, AHIA chief Dr Michael Armitage said.
"The key message is don't do anything until the Senate determines the format," Dr Armitage said.
Private health fund members warned not to drop insurance (The Daily Telegraph, 18/7/08)