Australian tax funds are better spent on their Medicare program than on private plans
The Age
February 19, 2004
Private health insurers are on shaky ground
By Kenneth Davidson
Despite the billions of dollars the Howard Government has poured into private health insurance with no better purpose than to destroy Medicare as a universal system, the future of the private health insurance industry is by no means assured.
It is a myth that the 30 per cent private health insurance rebate has led to an expansion in private health insurance. Neither the penalty 1 per cent tax surcharge for those on incomes above $50,000, which was introduced in July
1997, nor the 30 per cent subsidy effective from January 1999 had a discernible impact in increasing the percentage of the population with private health cover.
This suggests that the 30 per cent subsidy to private health insurance was a
waste of money - a straight income transfer to the mainly rich who already
had private health insurance.
Based on surveys that show that Australians are prepared to pay higher taxes
if they are geared to extra services such as Medicare, (University of Canberra health economist Ian) McAuley observes: “Most people who arrange health insurance deductions from their pay packet probably don’t care that much whether the deductions are made to HCF, Medibank Private or the Australian Taxation Office.”
But then again they might, if they understood that 11.3 cents of every dollar raised by the private health funds is spent on administration, compared with 4.8 cents of every dollar spent by Medicare.
If the nexus between private health insurance and private medicine can be broken in the minds of the public, the private health insurance industry would have a much diminished future - despite its powerful friends in high places.
http://www.theage.com.au/articles/2004/02/18/1077072708014.html
Comment: Australians now are understanding that private insurance plans, which have been granted government subsidies, are a scheme to destroy their medicare as a universal system of funding health care.
In spite of our record-setting budget deficits, the Bush administration has just provided the private Medicare Advantage plans with a massive infusion of our taxpayer dollars, paying them much more per patient than they would cost in our traditional Medicare program. The Australian experience demonstrates what a terrible idea this is.
Let’s cut the gift of taxpayer funds to these private Medicare Advantage plans and, instead, spend the funds on a better Medicare program, beginning with a genuine prescription drug benefit for all of us.
Message: 2
Date: Wed, 18 Feb 2004 10:23:14 -0800
Subject: qotd: The reference for today’s “quote” on Australia’s
private health plans
Australian Healthcare Association and
Australian Consumers’ Association
January 2004
Stress on public hospitals - why private insurance has made it worse A discussion paper by Ian McAuley, University of Canberra, for the Australian Consumers’ Association and the Australian Healthcare Association
Conclusion
Private health insurance is the wedge the Government has used to break the
universalism of Medicare. It has failed even its stated objective of shifting the burden of health service delivery from the public to the private sector.
Proposals to make private insurance work to provide equitable and efficient
outcomes are bound to fail. There is little policy sense in using a high cost financial intermediary to achieve what can be so much more easily achieved through taxation and Medicare - with their low collection costs, built-in progressivity, and capacity to control cost and resource allocation.
The confusion of the issues of public funding and public provision has given rise to a policy assumption that private hospitals must necessarily be funded through private insurance. This confusion serves vested interests, for it means that any proposal to reduce subsidies for private insurance can be framed as a proposal to do away with ‘the private health system’. The main purpose of this paper has been to expose that fallacy.
The report summary:
http://www.aha.asn.au/publications/publication_details.asp?pid=86
The full report:
http://www.aha.asn.au/documents/publications/86/040216%20Private%20hospitals%20private%20insurance%20(McAuley).pdf