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Jan 19, 2018

If milk prices went up like private health insurance …

Increases in private health insurance premiums are set to hurt household budgets by $750 a year -- and deepen the appalling intergenerational theft private health insurance represents.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

The forthcoming round of private health insurance (PHI) premium increases — touted by the government as the lowest in a decade — will mean premiums have risen nearly 80% since 2008, far ahead of inflation and a good demonstration of why PHI companies have racked up big profit increases in recent years.

42 comments

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42 thoughts on “If milk prices went up like private health insurance …

  1. Sleuth

    A good story Bernard, however comparing goods to services is a tricky area. Almost all the goods you quoted were ones in a competitive market, where consumers can shop around, whereas private services in the health industry are not generally very competitive and should be left in public hands.
    If the $6 billion dollar subsidy, combined with the billions in premiums were injected into public health, it would be a very well resourced service to all.

    1. CML

      Totally agree, Sleuth…someone here needs to have a look at Canada where there is NO private health system, and from all reports they manage quite well.
      We are becoming more American by the day…and suffering the obscene ‘gap’ payments as well!

      1. [email protected]

        CML there is private health care and PHI in Canada but it is far more equitable and nothing like here.
        http://www.nejm.org/doi/full/10.1056/NEJMp068064#t=article

        1. CML

          Cas…the link you provided is 12 years old (2006). I have friends and family in Alberta and Ontario…some have lived there for 50 years…and there is NO private system comparable with Oz. My cousin, who lives in Edmonton, and has worked in the health system there prior to retirement, was home on a visit 12 months ago and she says the same thing. They now have a left-wing (?NDP) government in Alberta, after 30+years of the conservatives. I doubt very much that this government will introduce private health insurance as we know it.
          There may be some small areas which can be covered by insurance, but basically the whole system is public universal healthcare…Medicare.
          Interestingly, I was working in Toronto as an RN decades ago when Medicare was first introduced in Canada…late 1960s, early 1970s.
          Of course there may be differences between provinces, just as we have between states…but my opinion remains that in Canada they have mostly public hospitals and health systems.

    2. [email protected]

      It is comforting to hear people speak as you have. Medicare could be so much more than it is. PHI is a rort and nothing else. Even when people crow about having the choice of doctors, I tell them, that, as a PUBLIC patient and a human being there are a whole raft of rights that allow them to refuse care from a doctor and ask for another. The food and environment are about all you get in a private hospital and even then, you could probably set up a bank account and contribute the equivalent of a monthly PHI premium. If you don’t use it; you can roll it over to next year or do what you like with it. Just an idea. We’re giving our PHI the flick.

  2. old greybearded one

    Hmmm. I belong to a not for profit and have for 40 years. I did not cost it much over the years, but my wife’s knees did eventually. To get that done under medicare in regional Australia might take 2 or three tears. I am getting pretty concerned about it as I near retirement age though, I doubt I will be able to keep paying it.

    1. bref

      I hear this a lot. I live in a rural area, yet in my experience people I know that needed surgery, got it in a very timely manner. My own soccer playing son has, over the years, had 2 ACL operations. Both on medicare, both within a couple of months of diagnosis, followed by extensive rehab immediately afterward. I’m sure there are people who have waited longer for procedures than was comfortable or reasonable, but in my experience (touch wood) its not the norm.
      What about the retired person who scrapes together enough to pay for private health, but after an expensive procedure, finds him or herself hit with an enormous gap payment.

  3. cp

    Why call it intergenerational theft? That implies older people agree with it. I’d bet that may not be the case. It’s corporate theft supported by the two major parties.

    1. Kenneth Piaggio

      ‘$6 billion a year plus interest that future generations of taxpayers will have to pay off’
      I agree that this is another form of Corporate Welfare that our Governments seem happy to keep paying whilst they cut Social Welfare, Education, Health payments but I am surprised Bernard that you continue with the neoliberal furphy that money spent now is a burden on future tax payers.
      This is not as it has ever been with government spending but you would not know it to listen to commentators/journalists who keep using the concepts around Household budgets to inform their economic language.

  4. Wayne Robinson

    I’m 63 years old and the only benefit I get from private health insurance is the exemption from the high income surcharge.

    I hated it when Howard brought in the surcharge. It’s not to support private hospitals and take the pressure off public hospitals. I can still go to a public hospital as a public patient. It’s to support private health insurance companies.

    I would have been much better off over the years if I’d self-insured paying for health care out of my pocket as needed.

    1. [email protected]

      Wayne – I’m with you – you’d be better off most years and might even be able to use some of the money for something else if not used on healthcare. Your money for you. What irks me is that no ALP government has ever tried repealing it and changing the Medicare contribution.

      1. Lee Tinson

        Wouldn’t need to change the medicare contribution if we stopped subsidising PHI. $6B!

  5. Richard

    The increased costs go largely into the pockets of the management and somewhat into those of the shareholders (shareholders come before customers but AFTER management of course), but rebates paid to the medical profession have not kept pace. Consequently in order to be paid anything like a similar professional would be paid in any other profession, the so called “gap” (which should be called “gist” or gross insurance shortfall tariff) goes up. However, it is nothing compared to what it would be if most medical specialist did NOT discount their fees against the recommended AMA rates.

    This is not to excuse the grotesque gaps that some people are faced with and the fact, often overlooked, is that many medical specialists work very long hours and see a great many people, thus some do make very very good money. That is not overcharging, just overworking!

    However as already mentioned, at the end of the day, so called free markets set the price for their product which the government forces people to buy or face tax penalties. Hospital margins are squeezed but the company do very nicely Thank You .. Good old Neoliberal theory.

  6. Jim Hart

    A better comparison instead of cars and phones would be with actual health services like the uninsured cost of a hospital treatment. The actual cost is made more confusing by the government’s weird combination of both rebate if you insure and penalty if you don’t. The government likes private hospitals as it means fewer demands on public beds, but the politics gets complicated because Medicare is federal while the states pay for public hospitals. Meanwhile the insurers get a gold pass.

  7. [email protected]

    Sorry if somebody else has already said this but, in quite simplistic terms, imagine if we contributed to Medicare even half of what is wasted on private health insurance (PHI) each year (and got rid of our PHI) – our universal health care system would be the envy of the world and nobody would be left behind. The US (at least during the Obama administration) spent more of its’ GDP (as a percentage), per capita on health care than Australia – with poorer health outcomes across all areas. Why the LNP constantly strains to privatise every public asset in sight just begs the question about whether their serving the public or large corporations and then the further question: what do they gain as a result?

  8. blindphoton

    All good points.
    I’ve been at war with my insurer to try to get a policy that’s strictly limited to science-based medicine and drop the snake oil like chiropractic, homeopathy and acupuncture – so far without any success. It really irks me paying extra for biologically implausible magic therapies.

  9. [email protected]

    You point out the blatantly obvious, Bernard, but the real question that needs answering is why this is allowed to continue. It’s a completely bizarre system when it is meant to ease the burben on the public health insurance scheme (Medicare) and yet, if I see a private specialist for a preventative health check (something you think any insurer would have an interest in encouraging) I can get a rebate from Medicare but nothing from my private health insurer. So a public health insurance scheme subsidises a private health check/consultation, but my private health isurance gives me nothing. At the same time my private insurer increases premiums exorbitantly, on the pretext that its costs (of providing nothing or very little) have increased.

    1. Wayne Robinson

      Duncan,

      Private health insurance covers private hospital treatment (plus a few auxiliaries such as dental). The rebate was supposed to act as an incentive for people to take out private insurance and take the pressure off public hospitals.

      Which as I noted, it does nothing of the kind. There’s nothing stopping a person with private insurance going to a public hospital and being treated as a public patient.

      If the aim was to take pressure off public hospitals, then a more sensible system would have been to introduce some sort of means test so that high income earners pay some or all of the cost of treatment in public hospitals providing at least some extra funding.

      I don’t think I’m getting the rebate currently (so at least that’s mean tested). I’m still forced to pay private insurance to avoid paying the Medicare surcharge.

  10. Dog's Breakfast

    I used to pay it when I was young, this was in my 20’s in the 80’s. Worked out it was a waste of money then, and all the changes have made it less value now.

    This is nothing but a prop for private companies. It serves no public utility, and if money foregone to the PHI went to public health we would have hospitals with gold plated taps, personal rooms, lots of attending physicians that weren’t overworked.

    My wife and I have self-insured for 25 years, we are way ahead. If I have to have an operation it will be covered by medicare, and if I have to wait I will. There is so much bull that is peddled by interested parties on this one.

    I’m proud to say that we have convinced quite a few people to stop paying.

    As for the inter-generational theft angle, that isn’t so clear in this case. No young person in their right mind would take it out, so it’s a tax on fiscal ignorance. Even older people get little value in it. It has however been a transfer of wealth from the public sector to the private, and this is the heart of the neo-liberal agenda. Propping up private sectors that we don’t need or want because their philosophy works on the principle that anything delivered by the public sector must be second rate. It isn’t, and the PHI industry should be left to wither on the vine, and the medicare levy increased to provide quality medical care all the way through life.

    This is at the deepest end of the lunacy of the neoliberal experiment. It stinks!

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