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Households trim spending to cover soaring health premiums

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Many households are considering trimming other areas of spending in order to cover the biggest hike in private health insurance premiums in decade, a survey has found.

In a sign of the importance families attach to private health cover, a survey commissioned by comparison service www.comparethemarket.com.au found that 47 per cent intended to cut back on other expenditure in order to be able to afford a 6.2 per cent jump in premiums due to come into effect from 1 April.

Not surprisingly, almost 42 per cent indicated they would shop around for a new policy as a result of the looming increase.

But, in a result that should comfort health funds, just 10 per cent of those surveyed said they would let their policy lapse.

The response belies claims, including those made by the Coalition, that the move by the previous Government to means test the private health insurance rebate would drive many people out of private health cover altogether and send a flood of extra patients into the public hospital system.

Indeed, the survey found that 87 per cent of respondents remained eligible for the full rebate even after the introduction of means testing.

The survey of 1000 adults was conducted by polling firm Pure Profile.

Adrian Rollins