The Federal Government has wound back the private health insurance rebate in a move that will save $1.9 billion a year.
From July 1 next year, the 30 per cent rebate will be reduced on a sliding scale for single people earning more than $74,000 and families with an income greater than $150,000 a year.
Instead, a "tiered" system will be introduced.
At the lower threshold, the rebate will be 20 per cent, rising to 25 per cent for those aged 65 or more and to 30 per cent for 70-year-olds.
Budget 2009: summary For that group the Medicare levy surcharge - essentially a penalty for not having private cover - will remain at 1 per cent of income.
The rebate for those in the second tier ($90,000 for singles, $180,000 for families) will be 10 per cent, rising to 15 per cent for 65-year-olds and 20 per cent for those aged 70 or more. The Medicare levy surcharge will be 1.25 per cent of income for that group.
For those in the third tier - singles earning more than $120,000 and families earning more than $240,000 - the surcharge will be 1.5 per cent and the private health rebate will be wiped out altogether.
The Government also announced today that health fund Medibank Private will become a for-profit business but will be government-owned and remain in public hands.
For full coverage and analysis see Wednesday's Mercury. 
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