What should happen to the private health insurance rebate this election? A $7 billion question

The private health insurance rebate costs Australian taxpayers nearly A$7 billion per year, and has cost over $100 billion since its introduction.
Yet the rebate’s return on investment has never been estimated.
In the middle of an election campaign and with a record budget deficit, it’s worth reflecting on why the rebate was introduced and whether it represents value for money.