The New South Wales government is claiming victory in its bitter dispute with private health insurers, in the face of an industry advertising campaign that warns of a “health tax” that would “force people out of private health insurance.

The non-profit HCF has departed from other major insurers and agreed to pay the state government the full price for its beds when its members are allocated single rooms in public hospitals.

In the previous fiscal year, the required rate was $892 per night, but HCF paid only $463 per night for the service, according to government data.

Although HCF has responded to government demands, the for-profit funds – Bupa, Medibank and NIB – are still struggling to pay the required rate.

Last week, the state legislature passed a law authorizing the government to levy a tax on all insurers to recoup lost revenue, worth $140 million a year.

The opposition refused to support the bill, saying it would amount to a “new health tax.”

Private Healthcare Australia, the body representing health funds, called the legislation a “kick in the teeth”, saying it could increase a family’s premiums by $156 a year.

NSW Treasurer Daniel Mookhey said HCF had agreed to do the “right thing”.

“However, the big three private, for-profit health funds, backed by the Liberal Party, continue to advocate for tax subsidies to their companies during a cost-of-living crisis.

Insurers warn of higher premiums

When the government threatened its legislation, Private Healthcare Australia launched an advertising campaign, accusing the government of trying to fill its “fiscal black hole” by taxing health funds.

The PHA said the increased levies should be passed on to consumers.

“In a cost of living crisis, this will force more people onto the public system, increase pressure on emergency services and push public sector patients to the back of what is already the longest queue. waiting for the country’s surgical procedures,” the advert warns.

When the legislation passed, Rachel David, CEO of the PHA, said the premium increase could force 75,000 people to drop their health coverage.

“This policy is a kick in the teeth for the millions of people in NSW who contribute to their own health care in a cost of living crisis,” Dr David said.

Mr. Mookhey accused the industry of “fear-mongering,” arguing that health funds would still require federal approval before raising rates.

The treasurer has not yet increased the levy and is waiting to see if the remaining big funds will follow HCF’s lead.

The government said that last year the NIB paid just $491 per night when its members were provided with a single room in a public hospital.

Bupa paid $501, while Medibank paid $515.

Many smaller funds, including Teachers’ Health, pay the required rate of $892 for a single bed.

In 2013, then-Treasurer Mike Baird introduced similar legislation to force health plans to increase their premiums.