Another Year, Another Pitch On Health Fund Premiums
The Age
Friday December 19, 2008
AUSTRALIA'S private health insurers are asking the Federal Government to approve large increases in their premiums - well above last year's rise of 5 per cent. This year, insurers have been affected by the sharemarket downturn and have seen their total profit halved to $560 million. At the same time, even though premiums grew by 9.5per cent, the size of their payouts rose by more than 10 per cent. Even so, the taxpayer is entitled to ask why should they further assist an industry that is already massively supported by Government funds. The cost of health insurance has been rising at a higher rate than the rate of inflation.
According to the budget papers, the 30 per cent-plus insurance rebate will cost $3.5 billion this year. It is an inefficient use of public money that has largely failed to achieve two of its purported aims: to take pressure off the public hospital system and to encourage people to take up private health insurance. Monash academic Charles Livingstone argues: "If all the money that went through private health insurance went through Medicare instead, we'd have another $700 million a year to spend on hospitals rather than fund managers." Health economist Ian McAuley argues major savings could be achieved by replacing the 38 private health insurers with a single insurer: administration costs in the private health funds are about 11 per cent of premiums.Altogether this adds up to a powerful case for rethinking the rebate and the industry it supports. The National Health and Reform Commission, set up to undertake a root-and-branch examination of the health system is due to report mid next year. It will test the Rudd Government's resolve to make health funding more rational and efficient.
© 2008 The Age
Share This