Australians should receive tax breaks if they are made to set up savings accounts to help cover some healthcare bills, private health insurer nib says.
Health Minister Sussan Ley announced in October a major review of the private health insurance industry following a rise in complaints about premium rises and policies that were “junk”.
She flagged the government’s 30 per cent rebate on ancillary cover for services such as optical, dental and physiotherapy could be scrapped, suggesting people could instead set up savings accounts to cover those costs.
The head of nib Mark Fitzgibbon has welcomed the review but says if people are made to set up savings accounts to cover their health costs, incentives are needed.
“We think a really good idea is to create incentives for consumers to save for their health or draw on the equity they might have in their home to fund their health,” he told AAP on Wednesday.
“If consumers are going to do that they need some sort of tax incentive.”
The wide-ranging review will also examine industry red tape, which has been blamed for driving up premiums.
Mr Fitzgibbon says health insurers need to be open minded about the review, which he hopes will also examine how private insurers can help manage the elderly and the chronically ill.
His comments came after he told shareholders at nib’s annual meeting that the rising number of older Australians was a key growth area.
Currently, nib holds a 10 per cent share of the under 40s market, but is “sneakily growing” its presence in the over 55s.
Shareholders welcomed news of a full year profit upgrade from the insurer, driven by a stronger-than-expected first quarter.
The insurer lifted its forecast for consolidated statutory operating profit to between $90 million and $100 million, up from its previous guidance of $85-$90 million and higher than the $81.7 million reported in fiscal 2015.
It also expects its underlying operating profit to come in between $102 million and $114 million, instead of its previous forecast of $96.3-$103.3 million.
Shares in nib closed 12 cents higher at $3.68