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Australians prefer government funding for dental care rather than ‘lame duck’ private health insurance

The Australian public subsidises private health insurance (PHI) to the tune of around $11 billion per year.  All tax payers contribute to this subsidy, despite the fact that less than 50% of the population hold PHI.

Both the Coalition and Labor have supported continuation of the rebate (to some extent) at every election since it was introduced in 1999.  Yet is this what the Australian public really wants?

John Menadue reports below on polling released by Essential Report on February 27 2018 which revealed that 48% of Australians favoured abolishing the taxpayer subsidy and using the savings to establish a Medicare Dental Scheme. 32% opposed such a change and 20 % did not have a view.  

He argues that this demonstrates a clear preference in the community for a public dental scheme over private health insurance subsidies.

This was originally published at John Menadue’s Pearls and Irritations blog and is re-posted here with permission.


John Menadue writes:

In this blog I have written extensively about the damage that private health insurance (PHI) is doing in Australia. We are sleep-walking into a US style health disaster.

If people want private health insurance, that is their right, but I see no reason why taxpayers should pay $12 b per annum to subsidise PHI , a socially divisive and nationally damaging private insurance boondoggle.

A lame duck industry

PHI is a lame duck industry propped up with taxpayer’s money. It does not deliver any health services. It churns money, including taxpayer’s money for the benefit of private hospitals and better off people and at great cost

The damage of PHI is increasing year on year. Since 1999 when John Howard introduced the government subsidy for PHI, overall consumer prices have risen by only 50% but PHI premiums have risen by over 150%. Many PHI policies are ‘junk’, hard to follow, with many surprising ‘exemptions’ and all sorts of gimmicks to try and attract new customers. It is all a con as Ross Gittins in the Sydney Morning Herald has said.

Medicare was established by Gough Whitlam in 1974 to address the same sort of mess we find that is developing again with PHI. The Nimmo Report at that time described the waste, inefficiency and unfairness of PHI.

The damage done by private health insurance

PHI has many damaging consequences and risks

  • It threatens our universal health system through seriously weakening the ability of Medicare as a single funder to control costs. We have seen the enormous damage that PHI has wrought in the US. We are steadily going down the same dangerous path. On present trends, we will have a divided healthcare system. One system will be for the wealthy with a safety net system for the indigent.
  • PHI not only weakens Medicare, but PHI companies do not have the market power to contest the power of health providers who set fees and prices for people who are privately insured.
  • It favours the wealthy who can jump the public hospital queue by going to private hospitals.
  • It penalises country people who have limited access to private hospitals.
  • It has administrative costs three times higher than Medicare.
  • It has made it extremely difficult for public hospitals to retain specialists who are attracted to remuneration which is often at least three times higher in private practice and private hospitals.
  • It has not taken the pressure off public hospitals.

The future of Medicare is at stake, but the ALP which was the proud founder of Medibank/Medicare doesn’t seem to care. At least the Liberal Party looks after its own. Private hospitals like Ramsey Healthcare that profit under PHI are large donors to the Liberal Party

The total cost of the taxpayer subsidy to PHI is $12 b per annum which includes both the rebate and the loss of tax revenue through tax incentives for high income earners to take out private health insurance.  This is middle-class welfare writ large.

Given the mess and high cost of PHI it is not surprising that Essential Report finds that Australians believe that their money would be better spent in a Medicare Dental Scheme.

See below the results from Essential Report polling.

Health Insurance – Essential Research

Most Australians with private health insurance currently receive a subsidy from the Australian Government to help cover the cost of their premiums. Would you support or oppose abolishing the subsidy and using those funds to include dental care within Medicare? 

Total VoteLabor VoteLNP VoteGreens VoteOther
Total support 48% 55% 39% 65% 49%
Total oppose 32% 27% 45% 17% 35%
Strongly support 22% 28% 13% 31% 28%
Support 26% 27% 26% 34% 21%
Oppose 13% 11% 18% 6% 16%
Strongly oppose 19% 16% 27% 11% 19%
Don’t know 20% 17% 16% 18% 16%

48% supported abolishing the private health insurance subsidy and using those funds to include dental care within Medicare and 32% opposed. Those most likely to support this idea were Greens voters (65%), Labor voters (55%) and aged 18-34 (57%).

Those most likely to oppose were Liberal National voters (45%) and aged 55+ (44%).

From: The Essential Report, 27 February 2018.

Australians opt for dental over PHI subsidies

The Report clearly shows that Australians believe that health and equity would be much improved if the $12 billion subsidy for private health insurance was abolished and those funds allocated to universal dental care within Medicare.

I have estimated that a Medicare Dental Scheme when fully implemented will cost about the same as the PHI subsidy of $12 b per annum. (Private health insurance and funding a Medicare Dental Scheme)

In December 2016 the National Council of Social Services in NSW in its report ‘Poor Health; the cost of living in NSW’ found that:

  • Almost 40% of people earning under $75,000 p.a. cannot afford to see a dentist.
  • Of those who do see a dentist, one in five do not go ahead with the recommended treatment because it is too expensive.
  • Poor dental health not only affects a person’s overall health but also makes it harder to find a job, particularly for young people.
  • There is a huge disparity in the availability of dental services, particularly in rural and remote areas.
  • There were 107,322 adults and 13,284 children on NSW public dental waiting lists.

The Whitlam and Hawke governments established Medicare largely because of the inefficiency and unfairness of private health insurance. But with the Liberal Party pouring more and more subsidies into private health insurance, and with the acquiescence of the ALP, Medicare is being effectively privatized and dental care needs are being ignored.

Every year parasitic organizations like Medibank Private, BUPA and others offer high cost look alike policies.

Australian health would be much improved if the $12 billion subsidy for private health insurance was abolished and those funds allocated to universal dental care within Medicare.

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#IHMayday16
#IHMayDay17
#IHMayDay18
#LoveRural 2014
Croakey Conference News Service 2013 – 2019
2013 conferences
Australian Centre for Health Services Innovation Forum 2013
Australian Health Promotion Association Conference 2013
Closing the Credibility Gap 2013
CRANAplus Conference 2013
FASD Conference 2013
Health Workforce Australia 2013
International Health Literacy Network Conference 2013
NACCHO Summit 2013
National Rural Health Conference 2013
Oceania EcoHealth Symposium 2013
PHAA conference 2013
2014 conferences
#IPCHIV14
AIDA Conference 2014
Congress Lowitja 2014
CRANAplus conference 2014
Cultural Solutions - Healing Foundation forum 2014
Lowitja Institute Continuous Quality Improvement conference 2014
National Suicide Prevention Conference 2014
Racism and children/youth health symposium 2014
Rural & Remote Health Scientific Symposium 2014
2015 conferences
#CPHCEforum
#CRANAplus15
#HSR15
#NRHC15
#OTCC15
Population Health Congress 2015
2016 conferences
#AHHAsim16
#AHMRC16
#ANROWS2016
#ATSISPEP
#AusCanIndigenousWellness
#cphce2016
#CPHCEforum16
#CRANAplus2016
#IAMRA2016
#LowitjaConf2016
#PreventObesity16
#TowardsRecovery
#VMIAC16
#WearablesCEH
#WICC2016
2017 conferences
#17APCC
#ACEM17
#AIDAconf2017
#BTH20
#CATSINaM17
#ClimateHealthStrategy
#IAHAConf17
#IDS17
#LBQWHC17
#LivingOurWay
#OKtoAskAu
#OTCC2017
#ResearchTranslation17
#TheMHS2017
#VMIACConf17
#WCPH2017
Australian Palliative Care Conference
2018 conferences
#6rrhss
#ACEM18
#AHPA2018