New push on health care privatisation
By Jonathan Singer
"Even though the federal government sticks to the line that Medicare is safe, what is happening is the privatisation of the health system. The push is on for everyone to pay for their health care", Doctors Reform Society president Dr Con Costa told Green Left Weekly in the wake of the May 11 federal budget. Medicare, he said, may only "pick up the pieces" left behind by the private health insurance funds — very old and very young people.
The most significant budget proposal is so-called Lifetime Health Cover. From July 1, 2000, private health funds will be able to charge new joiners an extra 2% for every year they are older than 30 years old (up to 65 years old — a maximum surcharge of 70%).
This is the "stick" wielded to make people take out private health insurance while they are young rather waiting until an age when they are more likely to be ill more often. The "carrot", offered since the start of the year, has been a 30% rebate on premiums for new and existing fund members.
The Coalition has adopted these measures in an attempt to turn around the decline in the private funds' membership. In 1984, when Medicare was introduced, 65% of the population were privately insured; at the end of 1998, it was 30.1%. In the first three months of 1999, with the rebate operating, the membership decline was arrested. Numbers have grown by just 57,000, to 30.3% of the population. Supporters of the government policy have applauded the 3.6% (8609) increase in membership among 20 to 24 year-olds.
The government rebate, costing $1.4 billion per year, "is transferring money, raised predominantly from workers through pay-as-you-earn income tax, to the mostly wealthier people who have insurance", Costa said. "The money is being given to the private health funds. It's money down the drain.
"The money comes out of the public health budget. There'll be more tightening in the public health system — more shortfalls and more rationing. The transfer of resources to the private system doesn't even help there. The private heath funds are wasteful." Costa explained that only 3% of Medicare's funds go to administration costs, compared with 13% in the private funds.
Costa pointed out that the government has an ideological commitment to the private funds. "Lifetime Health Cover is made to sound like you're getting a bargain, but young people don't need private health cover. They've got a good deal under Medicare."
One result of Lifetime Health Cover is the abolition of "community rating" under which private funds had to charge the same premium for the same insurance regardless of a person's age. Now, Costa said, "the older and sicker you are, the more you must pay for private health insurance. It's a stupid way to run a health system. These are the people you want to cover, but it is going to be made too expensive for them."
The government is also moving to restrict pathology tests and the prescription of drugs. There will also be an agreement with the general practitioners' association to cap the total amount Medicare pays to GPs in rebates. Costa expressed the hope that this proposal would result in more funding for bulk-billing GPs "who have been squeezed now for years" because Medicare rebates have not been increased. "The money should be going to this level, to improve primary health care services", he said.
But Costa is not convinced that federal health minister Michael Wooldridge is approaching the negotiations in this way. A group of doctors challenging for the leadership of the Australian Medical Association has suggested that Wooldridge's aim is to restrict funding so that GPs "ration" consultations.
"The government is making all these bureaucratic changes, but I don't think they will work", Costa continued. "The health funds won't do well, but we will see also the demise of Medicare because the federal government can't keep funding both. The funds [for Medicare] will dry up. Then people will either have to pay for health care, or have no health care."
The government's latest proposals are explained by its desire to undermine universal health provision through the public hospital system and Medicare. As long as these services retain their quality and universality, the majority of the population will continue to choose them. If they are reduced to providing only a basic "safety net" for the elderly and the poor, the private health funds can expand dramatically and dominate health funding.
On May 12, Labor health spokesperson Jenny Macklin issued a press release that suggests Labor wants to change private health insurance so that consumers "will willingly buy" it because they can "see some value" in doing so. But for so long as the private funds exist, they will cry poor about the need for a "level playing field" without competition from more efficient and, potentially, more accountable and equitable publicly funded health services.