People who sign up to private health
insurance to avoid tax or financial penalties are younger, healthier and less
likely to be admitted to hospital as private patients, recently released University
of NSW research claims.

Health Minister Tony Abbott, however, still
stands by the Government’s private health insurance rebate. “If there were much
lower rates of private health insurance we’d have much less use of the private
health system and there would be tremendous pressure on the waiting lists,” he
told the ABC yesterday.

And an old mate of mine from South Australia, Australian Health Insurance Association
chief executive, Michael Armitage, echoes those remarks. 55% of
the major surgery in Australia is now done in private hospitals,
he says.
“Everybody knows the public system could not cope with that sort of load being
imposed on what they are already finding they can’t cope with.”

Across the
Tasman, though, they have different views. There’s a doozy of a document up on
the web from the NZ Treasury to their Minister on
the efficacy of subsidising private health insurance.

We Aussies sometimes think our Kiwi cousins
are simplistic. Well, you can’t get more basic than the last lines: “We recommend you
note that the cost of subsidising private health insurance would far outweigh
the fiscal benefit in terms of reducing demand on the publicly-funded health

Peter Fray

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Peter Fray
Editor-in-chief of Crikey