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Greg Hunt’s Pea & Thimble Trick

By Terence Mills

If you buy private health insurance cover, you are about to be scammed, watch out!

Greg Hunt, the responsible minister – let me rephrase that – the minister responsible, has announced that he has agreed with the health insurance companies a premium increase for 2018 in the order of 4% which he will tell you is an amazing achievement and the lowest increase in seventeen years. His media advisers have told him not to smirk or giggle when he does interviews over the next few days.

What he is actually trying to spin is that we will still be given a bloody nose but not as much as last year when the average increase was 4.84%. While there will undoubtedly be much rejoicing in the streets of the nation, what Greg won’t be telling you – or he may mumble inaudibly – is that the health insurance rebate granted to you by the commonwealth government and which you may recall as being around 30%, depending on your income, will be reducing and will come in at something like 25% on average.

The private health insurance companies won’t tell you what your government rebate is either and you will notice that they no longer show the value of the rebate on the renewal notice they send to you. Even when you ask them how much your government rebate is they will be reluctant tell you: my health insurer actually had the nerve to ask me why I wanted to know what my rebate was!

Just to be clear, the government rebate has gradually been eroded as private health insurance premiums have been increasing, known in the industry as a double whammy. Take, for example, an individual aged under 65 with an income under $90,000 the rebate has gone from 27.820% in 2015 to 26.791 per cent in 2016 and 25.934% in 2017 and if you were over 70 with income under $90,000 your rebate has gone from 37.094% in 2015 to 34.579% in 2017. The new rebate for 2018 won’t be announced until March, by which time you will have absorbed the 4% premium increase announced this week. So, your increase will, in fact, be greater than 4% as your government rebate will be reduced. What this means is that the annual increases in private health insurance premiums have been more than double the rate of inflation in recent years: Mr Hunt won’t be mentioning that.

At the same time the vast lobbying resources of the private health insurance industry are after another lurk to lock people into their dodgy products. At the moment single people who earn more than $90,000 and families earning more than $180,000 pay an extra 1% -1.5% tax if they do not have private health cover, with the levy tiered according to income. In its pre-budget submission to the federal government, Private Healthcare Australia said that they want the surcharge recalculated to provide a stronger incentive for these high-income earners to take out and maintain private health cover. They say to achieve this outcome the surcharge should be increased to a minimum of 1.5% and reach 2% for the highest income earners: what the coalition used to call a great big new tax when they were in opposition but now consider to be prudent fiscal management.

The private health insurance rebate, in 2016–17, was worth around $6.3 billion to the insurance companies as an industry subsidy and represented 27.4% of total industry premium revenue. So, as the rebate is eroded you can expect the private, for profit insurers to claw back lost revenue from their customers by premium increases.

By the way, when it comes to industry subsidies which is against everything the coalition stands for, the support for the automobile industry at around $415 million a year under the former Labor government was unsustainable according to the coalition. Yet $6.3 billion a year to private insurance companies is OK: Mr Hunt won’t be discussing that either.

All of this at a time when our once internationally lauded universal healthcare system, Medicare is undergoing government imposed stress as the fee paid to GP’s for a consultation has been frozen at $37 for six years and will not be reviewed until 2020. This was a move designed to force doctors to abandon bulk billing and introduce co-payments, originally the goal of everybody’s favourite Health Minister, none other than the egregious Peter Dutton.

When Labor suggested in 2016 that the coalition were privatising Medicare by stealth the coalition cried foul. But what they are actually doing is undermining and underfunding Medicare at every turn and making private health insurance the default system in Australia with Medicare a safety net for the poor: that’s how capitalism works – ask Donald Trump from whom we take our lead!

21 comments

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  1. babyjewels10

    So Mediscare was a lie, was it?

  2. Rhonda

    Dirty rotten scoundrels

  3. Glenn Barry

    Wonderful analysis and right on target
    Greg Hunt is TOTALLY AWESOME
    First he saved The Great Barrier Reef – https://twitter.com/greghuntmp/status/737191181449207808?lang=en

    Now he’s working his magic on the health care system

    Can the coalition please promote this man to a position where he cannot ruin anything…

  4. Jaquix

    Thanks for this info re the subsidy reducing, so creating a double whammy. The whole thing of subsidising insurance premiums for health insurance is wrong. Yes I know all the arguments about saving the public health system etc. but at a cost of $6.3 billion per year, thats a huge benefit to the insurers, and a drain on the taxpayer. It means many taxpayers who can barely get by on current wages, are subsidising the insurance premiums of the better off, so they can jump the queue and get better or quicker health treatment.

  5. Graham Houghton

    They’re not going to stop privatising our health by stealth until it’s done. Drip by tiny drip, so that although we know it’s happening, we just fail to take any real notice of it.

  6. MikeW

    Never seen the point in private health insurance, it’s just a scam.
    Last time I went to my GP made the mistake of telling her I smoke and drink (yes I know) sent me for blood tests, chest X-rays all good, determined to find something wrong sent me for more blood tests, CT scans lung capacity tests, all good, apart from multiple asbestos on the lungs which fortunately hasn’t developed into anything sinister.
    And the cost for all of this? Zero apart from the Medicare levy.

  7. Jack Russell

    With a public system why bother with private.

    If everyone had ignored the private system in the first place we wouldn’t now be saddled with this extortionate mess of carpetbagging fraud.

    The unthinking have been conned into paying TWICE for health care!

    If you can afford to make payments to these rip off private companies, then you can certainly afford to put it in a special purpose account of your own instead, to either use if needed, or keep if not.

  8. totaram

    ” Drip by tiny drip, so that although we know it’s happening, we just fail to take any real notice of it.”
    If you do notice it, they shout “Mediscare!” and the tabloids back that up.

  9. Chris

    My first visit to the doctors as an adult with a medicare card was in 1979. He was a good GP too, didn’t have those medical clinics that we have now, and took extra time if you had multiple problems. And you could call up and get a spot same day Cost was $20, rebate $17. Out of pocket $3.

    Now this was when I was earning around $125 pw net. So all relative I know. But the out of pocket now is much larger, much much larger for a good GP and try getting an appointment the same week, let alone the same day. So we all go to the bulk billers now, if you’re lucky to live in place where they have them. And, self diagnose too.

    And, I cringe when my partner (in indigenous health services) tells me they’re hiring doctors for $150 ph.

    At least if I had a heart attack, I’d be looked after here, so there are some benefits left.

    Until there aren’t.

    Not the Australia, I remember.

    When was the last time any industry regulated by the government didn’t get a price increase beyond the shit wage increases we are forced to accept these days?

  10. Terry2

    The tragedy is that the coalition’s ideological commitment to privatising health services comes into stark relief when you look at the way out-of-pocket or OOP expenses have increased in Australia under this government.

    A recent OECD Report – https://www.oecd.org/…/Health-at-a-Glance-2015-Key-Findings-AUSTRALIA.pdf – shows that in Australia OOPs account for 20% of total expenditure on health care. In other words, despite a public health system and a private insurance system, uninsured costs represent twenty cents in every dollar expended. By contrast, out-of-pocket costs account for only 10% of health spending in the United Kingdom, 13% in New Zealand and 14% in Canada, which have similar universal healthcare systems to our Medicare.

    The reason why we are seeing this disintergration of our health insurance system is not because we are getting sicker or overusing the services. It’s all about ideology.

  11. Peter Stevenson

    Each year as the cost goes up the percentage increase is on a larger amount so this years 4 percent increase is below the real cost.

  12. Aortic

    Don’t forget we are talking about the World’s Greatest Minister here. A bit of respect please for the man who so celebrated the repeal of a carbon pricing and instigated the Direct Action plan. A bit of respect please and for his fallen colleagues Abbott, Abetz and Andrews. Piers Akerman and Gerard Henederson keep calling for their reinstatement so I really think we should all sit up and take notice. not to mention Cory Bernardi who is now our favourite music lover. The choice is endless.

  13. Harry

    Private health insurance is a neoliberal scam. Only lines the pockets of the insurance industry and doctors/specialists. Fully resource public health services, include dental and then cancel funding for this scam.

  14. Matters Not

    Perhaps Labor might adopt the policy position introduced by Pierre Trudeau decades ago re government subsidies paid to specialists.? Trudeau (the senior) agreed that specialists could charge what they liked for services rendered BUT if they wanted to receive a government subsidy then the price of that service had to be capped. While specialists kicked and screamed, the vast bulk signed up because, without government assistance, their fees would be unaffordable and their customers would desert in droves.

    Anyone who experiences specialist consultations – and services rendered – knows that it’s financial extortion.

    Come on Labor – get serious about health care.

  15. 245179

    “M N” for PM.

  16. Harry

    Totaram: Agree. the analogy is similar to an angler fishing in a small boat fishing close to shore. The angler nods off to sleep and wakes later to find the boat a long way out. Its a time-honoured approach; chip away at public programs whilst pretending that you are maintaining funding. The Coalition are not stupid, they have a very ideological plan to strip public services gradually, using the mantra of “budget repair” (which I doubt they really believe) hoping that Aussies will not wake up and realise they are being screwed.

  17. seaworks

    If only we had a government who would copy the UK health system ( yes I know it has faults) and do away with the hotch potch of rorts we have now.

  18. jimhaz

    Realistically private health should have maximum profit margins – we are not the US.

    Forced Health insurance is one of the many reasons I regard John Howard as the very worst PM Australia has ever had in terms of negative legacy.

  19. margcal

    Seaworks, the NHS is also being dismantled. Both Australia and the UK are taking the US option.

  20. seaworks

    I know that the tories are trying but if labour gets in they will stop the rot.

  21. Peter F

    Any government ‘assistance’ to the consumer is an indirect payment to the supplier.

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