Private health insurers will resume paying single room rates when their members use the public system.
Following months of negotiations with the NSW Government, all 53 private health funds in NSW will pay single room rates from January 1, 2025.
The successful resolution means the NSW Government will not need to increase the Health Insurance Levy (HIL) in order to recover costs.
The decision of some funds to stop paying the single room rate had been costing the public health system $140 million a year.
By resuming the payment, the sector is ensuring that the state's world class public hospitals and the people who rely on them, will no longer miss out on critical funding.
The Minns Labor Government passed legislation in October, mirroring the approach taken by then-Treasurer Mike Baird when private health funds first stopped paying the correct room rate in 2013.
The legislation allowed for the government to cost recover through an increase to the HIL, which could be enacted if funds did not resume paying the single room rate.
The NSW Opposition refused to support the reintroduction of this bill, with the Opposition Leader, Shadow Treasurer and Member for Vaucluse instead backing ongoing taxpayer funded subsidies to private insurers.
The NSW Government commends the private health insurance sector for reaching a resolution to this issue.
The government will continue working with insurers on improved data sharing to increase transparency for private patients who use single rooms in the public system.
Treasurer Daniel Mookhey said:
"Over months of negotiations, the NSW Government kept the door open to reaching a resolution with private health insurers.
"We now have an agreement that's good for our public hospitals and the millions of people who rely on them every day.
"The NSW Liberal Party will be recorded as being on the wrong side of this issue - backing subsidies for private health insurers instead of fighting for the public system."
Health Minister Ryan Park said:
"This agreement means private funds resume paying their fair share and our public hospitals are better off.
"This is welcome news for patients and public hospitals and I am grateful we've been able to reach an outcome.
"We said we'd work with funds to resolve this and that's what we did."
