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surgery
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tests
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Some timely background to the private health insurance rebate debate

The Government’s third attempt to introduce means testing of private health insurance rebates faces considerable uncertainty, according to media reports, with Health Minister Nicola Roxon due to introduce the Fairer Private Health Insurance Incentives Bill 2011 into Parliament this morning.

Meanwhile, here are some snippets from the Croakey archives on private health insurance subsidies. (Update: And here is a more timely analysis, from today’s FlagPost blog by Amanda Biggs, of the Commonwealth Parliamentary Library.)

Health policy analyst Jennifer Doggett
May 5, 2011

The PHI rebate is basically an industry welfare measure which props up the over-regulated, internally conflicted and phenomenally inefficient private health insurance industry at a cost of about $4.5 billion a year to the tax payer.

Most credible health economists (apart from those being paid by the PHI industry) agree that the rebate scheme is a policy nightmare. Study after study has found that it has virtually no impact on fund membership and that the funding spent on premium subsidies would deliver better health outcomes if used to directly fund health services.

and Jennifer Doggett on 16 Sept, 2010

Research indicates that private health fund membership is unlikely to change significantly as a result of means-testing. If a small number of people drop their cover as a result of the changes, it is likely to be those at low-risk who have taken out cover to avoid tax penalties. These people are low level users of health services and their decision will not impact on demand for health care in either the public or private sectors.

If the independents are sceptical of this finding, they need only consider the position of the Australian Healthcare and Hospitals Association – the peak national body for public hospitals and community health and aged care services. The AHHA supports the means-testing of the rebate and has no concerns about any adverse impact on its members.

If the independents are concerned about inequities in access to health care in rural areas and want to reduce the increasing stress on public hospitals, they should support the means-testing bill and use their voting muscle to wrangle some additional funding for public health services in rural and regional Australia. Every dollar we spend on the unfair and inefficient rebate scheme is one we cannot spend providing services to those Australians who need them most.

***

John Menadue, of the Centre for Policy Development
March 17, 2010

A particular issue which should concern country people is the inequity and inefficiency of the $5 billion p.a. government subsidy to high cost private health insurance companies. Put simply, this corporate welfare enables relatively wealthy people in the cities to jump the queue for elective surgery in private hospitals and it deprives public hospitals of resources.  Recent data from the Australian Institute of Health and Welfare (Australian Health Expenditures by Remoteness, January 2011, page 41) shows how this subsidy short-changes country people because of the few private hospitals in country areas.

***

Associate Professor David Atkinson, Broome, WA
14 Feb, 2011

Private health insurance subsidies, all completely unaccountable, are why the Commonwealth is unable to fund its share of public hospitals. Vast subsidies to private health insurance are a major part of the cause of health inequality in Australia and without reform of the PHI rebate public health care for the majority of Australians will suffer.

***

Professor John Wakerman, Director, Centre for Remote Health
14 Feb, 2011

Changes to private insurance rebate (are) overdue. Many of us would be happy with its abolition.

***

Anne-marie Boxall, Commonwealth Parliamentary Library
19 November, 2010

There are several reasons why the funds face difficulties when it comes to controlling premiums. First, funds are unable to refuse people membership based on their health status; they are, however, allowed to delay providing coverage for a defined period of time for some pre-existing illnesses. Second, funds are prevented from charging members premiums based on their risk of ill health. Funds with a high proportion of members with chronic illnesses are likely to have relatively high claim costs, although there are some mechanisms in place to equalise risk across funds. And third, because private health insurance funds do not cover all health services – funds, for example, are prevented from covering general practitioner services, and many do little in the way of prevention and health promotion (although this is beginning to change) – they have relatively little capacity to significantly improve their members health status, reduce health care utilisation and therefore the number of claims made.

In this era of health reform, the government may be prompted to rethink the underlying structural problems in the private health insurance industry in Australia.

***

Amanda Biggs, Commonwealth Parliamentary Library
June 6, 2011

Regardless of the legislative fate of the means test, the long-running debate over the rebate and private health insurance more broadly is likely to continue. This reflects both the ongoing division of opinion between supporters and opponents of the rebate as well as the difficulty of assessing the impact of a single component in a complex, multi-faceted and interactive system.

***

Update:

You can also watch Minister Roxon’s interview on Radio National this morning about the PHI legislation, health reforms, carbon tax, and other matters…

[youtube]http://www.youtube.com/watch?v=FmdZMufZwGs[/youtube]

Comments 4

  1. Duggy the DC3 says:

    Food for thought for Rural Advocates

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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
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