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Families to pay for Medicare overhaul

13 Aug, 2008 04:15 PM
Families would fork out $70 more a year for private health insurance as a result of a controversial decision by the Federal Government, the ''father of Medicare'' said yesterday.

Australian National University professor John Deeble said individuals would also pay about $45 extra annually for health cover.

Health Department deputy secretary David Kalisch admitted Australians were likely to pay more for private health insurance in the wake of changes to the Medicare levy surcharge.

But premium increases would be ''considerably lower'' than the 5 per cent rise predicted by economists and Professor Deeble.

Professor Deeble and Mr Kalisch were two of several witnesses who gave evidence yesterday to the Senate Economics Committee.

The committee is conducting an inquiry into the Government's change to the Medicare levy surcharge imposed on some people without private health cover.

The Government intends to lift the thresholds by $50,000, which means singles can earn $100,000 and couples can bring in $150,000 before they pay the surcharge.

Critics including the Australian Medical Association argue it will intensify pressure on the overstretched public hospital system, encourage people to dump their private health cover and drive up premiums.

Mr Kalisch said the Government's change would have a ''small impact'' on premiums.

''I have to say it's nowhere near the 5 per cent range that a number of people have talked about ... it's probably less than half that,'' he said.

Access Economics and Professor Deeble predicted premiums would increase by 5 per cent as a result of the changes.

Mr Kalisch said the department expected a ''modest'' impact on public hospitals.

Professor Deeble said public hospitals would treat about 100,000 more inpatients annually under the ''worst-case scenario''. And the bill for public hospitals would increase by about $360million a year.

Opposition health spokesman Joe Hockey said $360 million was a significant sum that could be spent on other health services. ''Anything that increases insurance premiums and increases the number of people relying on public hospitals must be seen as bad policy,'' he said.

Health Minister Nicola Roxon defended the change to the surcharge, saying many claims about the impact were exaggerated. ''If the insurance companies produce attractive, affordable policies, then people will continue to buy them,'' Ms Roxon said. ''Any premium increases will have to be approved by the Commonwealth, and I have made clear to the insurance companies that I will not accept their attempts to use this as an excuse to hike premiums.''

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Date: Newest first | Oldest first
I finally used my private health cover with medibank private to find that the service was covered at the minimum hospital rate because they did not have a contract with the hospital. Unfortunately the medicare determined minimum hospital cover was below the excess medibank charged me. Given I pay the gap between the Dr’s fee and the medibank schedule fee-can someone please explain why ANYONE would have private health cover if they weren’t financially bullied into it by the government?
Posted by jessica, 13/08/2008 1:07:41 PM
Right on Darren Bird, this policy is intended to hurt those with private insurance and force them into the public system. All my life I've voted for the ALP, now the 'I know what's right for you' crowd are in I will vote for them no more!
Posted by Old Fart, 13/08/2008 2:55:08 PM
Public hospitals are generally better than private hospital for big diseases. You get more doctors/nurses/allied health staff per patient. Private hospital are better for surgeries. private hospitals should be promoted to take the pressure off the public system.
Posted by tony, 13/08/2008 3:35:02 PM
Perhaps the money that the government gives to prop up private health insurers along with money we also are forced to give so we have private health insurance went into medicare I am sure that our public hospitals would be more serviced to overcome waiting lists and the countries health needs. Health insurers and private hospitals are buisnesses with share holders most are overseas companies and are there to make money why are subsidising them to make profit in the first place.
Posted by rex, 13/08/2008 4:54:40 PM
Considering the intent of the Surcharge; to motivate higher income earners to utilise Private Health Insurance (PHI) and remove some of the financial burden on the Public Health System (PHS). The motivation for purchasing PHI should be for the increase in choice & quality of healthcare gained (the discussion of the appropriateness of the wealthy being the only ones able to take advantage of better healthcare is for a different time) not due to the decrease in tax paid as a result of having PHI. Nicola Roxon (Health Minister) has nailed a big issue that little focus is being applied to – if the PHI companies offered a good product @ a reasonable price Australian’s would purchase PHI. The amount of times I have people without PHI say the reason is because the gaps far outweigh the cover. I understand that PHI companies are running a business, but the solution is not to keep raising premiums. Surely increasing policy holders by increasing the value of the cover or reducing operating costs of the company makes more sense. It appears the Govt is supporting PHI through the rebate and increasing the threshold, so the question stands what are the PHI companies doing to get our business?
Posted by FB, 14/08/2008 11:59:39 AM
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