The cost of private health insurance is set to jump for higher income earners with the government poised to secure the passage of legislation to means test the 30 per cent private health rebate.
It is understood the government has secured the three crossbench votes necessary to pass the legislation through the House of Representatives.
The means test is worth $2.4 billion to the budget over the next three financial years and will drive up the cost of premiums for high income earners.
The rebate will be phased out starting with singles on incomes of $83,000 and families on $166,000.
It will disappear altogether for singles earning $129,000 and couples earning more than $258,000.
Single people on taxable incomes of more than $83,000 can expect their health insurance premiums to jump by between $150 and $500 a year, depending on their pay level, as a result of the means test.
Couples and families will face increases of between $300 and $1000 on typical health premiums once combined incomes rise above $166,000.
But a further penalty, to stop high earners from dropping their insurance, is the Medicare levy surcharge. That will rise from the 1 per cent currently on uninsured higher earners in two stages to a total of 1.5 per cent on incomes above $129,000 for singles and $258,000 for families.
The government says that 7.9 million people will not be affected by these changes, but that leaves more than 2 million who will be. Even so, the government's claim that all but 0.3 per cent of people with private hospital insurance will retain it, and only 27,000 will drop their cover is contradicted by the health funds, which insist the exodus and the impact on public hospital queues will be much greater.
The opposition will portray the passage of the bill as a broken promise given the then-Labor leader, Kevin Rudd, promised before the 2007 election not to touch the rebate, which was introduced by the Howard government in its second term.
The passage of the rebate has been made possible by the defection of Peter Slipper from the Liberal Party to the Speaker's chair.
This meant Labor needed just three crossbench votes instead of four. It already had the support of the Greens MP Adam Bandt.
It is believed independents Rob Oakeshott and Andrew Wilkie, who announced in July he supported the means test before backing away, are also on board.
The final vote in the lower house is expected next week.
The Senate is expected to pass the legislation as the Greens hold the balance of power.
With Mark Metherell
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