Fed: Howard plans deregulation to combat insurance premium hikes
The Howard Government is planning to deregulate the private health insurance industryin response to the outcry over big premium increases.
The Sydney Morning Herald reports the move is also likely to force small funds into mergers.
Health Minister KAY PATTERSON ordered a review of government controls over the fundsafter the Government was forced to approve premium rises -- including Medibank Private'saverage 8.9 per cent rise, which takes effect later this month.
The report says changes being considered include axing the Government's veto powerover premium increases, instead seeking to increase competition to force prices down.
It says the increases have prompted questions within the Government about whether itsreforms - which included the $2.5 billion tax rebate to encourage people to join healthfunds - have failed to deliver.
According to the newspaper, the Government's review will look at deregulating fundsto force them to compete more directly and is likely to focus on deals funds do with hospitalsand doctors, with a view to forcing the funds to press for cost reductions.
AAP RTV as/pc
KEYWORD: INSURANCE REVIEW (SYDNEY)
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