2GB interview with Dr Rachel David about the NSW Government’s health tax

Transcript
Station: 2GB
Program: Weekends
Date: 20/10/2024
Time: 11:48 AM
Compere: Luke Grant
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia

 

LUKE GRANT: Now, would you drop private health insurance if the premiums just become too much? I guess, silly question. There has to be a time, has to be a time where just, you know, you end up thinking, I can’t do this anymore. There are fears that there might be. Well, in New South Wales alone, 75,000 residents could be forced to drop their private health cover if the State Government follows through with a plan to hike taxes on health insurers. All this boils down to a dispute over room payments. The State Government wants insurance companies to pay a higher rate than what they are paying now when their customers get a private room at a public hospital. They want insurers to pay a room rate of $900 per night- 900, double the price of the standard rate set by the Commonwealth. Private Healthcare Australia, the peak industry body, reckons that could increase costs by nearly $700 million over four years. And of course, that sends premiums one way and that’s up. Let’s have a chat to Doctor Rachel David, CEO of Private Healthcare Australia, who’s on the line. Rachel, lovely to talk again. I hope you’re well?
RACHEL DAVID: Morning, Luke.
LUKE GRANT: You don’t think insurers should be paying $900 a night for a private room and I understand exactly, given the numbers, why. But let me start here, if I might, there’s a- I don’t know if this is a trick being played or what, but you’re often asked if you’re in a private hospital – and I’ve been in this situation through emergency once, maybe twice, and watching friends and family in the same situation – where they inquire about your level of private cover and whether you’d be prepared to offer that to the public system. And I’ve often wondered, hang on, this wasn’t designed to pay for a public bed. I pay Medicare, a levy for that. What’s going on here? Can you allude to that in some way?
RACHEL DAVID: Well, you’re paying twice already, both through your taxes, through Medicare and through your private health insurance. What the Labor- what the Minns Government has done last week is they’ve introduced legislation to make- to really make 4 million people with private health insurance in New South Wales pay a third time. They’ve introduced an extra tax on private health insurance. This stuff about the bed rate is a complete misdirection. It’s straight- it’s a straight revenue grab. As you and anyone else who’s been admitted to a public hospital well knows, there are no single rooms routinely made available for private patients coming to emergency departments. That is just a distraction. The problem that we have is that the Government has introduced legislation to increase premiums for people with private health insurance, on average, $156 for a family right in the middle of a cost of living crisis. And look, I think that’s pretty cruel for people who are already paying for the New South Wales health system through their taxes. And they’re trying to do the right thing by paying a little bit extra through their private health insurance.
LUKE GRANT: [Talks over] Yeah. And I’ll just make the point for listeners in Brisbane via 4BC that these cash grabs or these ideas start somewhere and to think they won’t infiltrate wherever you might be listening the ACT or Queensland or elsewhere is folly. This will be a try on from a government, one that’s probably safe electorally for some time. So they’ll try it on and see how they go. But you’re right. It’s a cost of living crisis. It’s difficult to keep paying for private health for lots and lots of people. The last thing we need is to see our premiums increase. How much will this see the Government’s coffers in New South Wales increase? Have you been able to work that out?
RACHEL DAVID: Well, what they’ve put in the budget was half $1 billion over four years. It looks like they’re more chasing 700- well, $700 million over four years. But the stupid thing about this, Luke, is they’re not going to raise the revenue because people will drop out. So what they’re doing is they’re hurting people in the hip pocket. We’ve modelled very closely that about 72,000 people will drop out just in the first year because of this extra tax. And so where are they going to go? Straight on to the end of a waiting list if they need any kind of- or the emergency department, if they need any kind of serious health treatment. So it really is a complete own goal. When we’ve asked people from the New South Wales Treasury for their modelling and whether they did any analysis of this, we’ve got nothing. So it shows that it’s been poorly thought through. It won’t work and it will actually hurt 4 million people in New South Wales who are trying to do the right thing by contributing a bit for their healthcare.
LUKE GRANT: So when someone in a- in the public system says, oh, I see you’ve got health insurance, would you mind if we- if we use that to offset the cost of running the health system? I mean, you are kind of well, I’m paying for it. I may as well. That can’t do anything but keep premiums where they are or higher, surely.
RACHEL DAVID: Yeah. Well, look, it’s a way of raising extra revenue. Under the Medicare system, the state and federal governments together pay for public hospital beds. But some state governments like to use people with private health insurance to top up their funding.
LUKE GRANT: Yes.
RACHEL DAVID: So actually, last year, by doing this, the New South Wales Government got over $600 million extra funding from people with private health insurance already, but people- and so what they’re wanting is even more. And what I’ll draw your attention to is that in New South Wales, 20 per cent of the patients in so-called public hospitals are private patients. And this is a state which has record high waiting lists. It has the highest waiting list in the whole country. So they’re trying to reach this revenue target. Not only are they no single rooms available for private patients, that’s just a straight out lie. They will need to drive even more people in private patients by chasing them out of emergency departments and asking for their details. They’ll be driving even more private patients into our public hospitals. So at what point do you just have to be honest and say, well, look, they’re not really public hospitals? We’re going to fill them with as many private patients as possible so we can charge health insurance extra.
LUKE GRANT: We’ll keep in touch on this. Rachel, great to talk to you again. Thanks so much for raising the issue.
RACHEL DAVID: Thanks, Luke.
LUKE GRANT: Good to chat. Doctor Rachel David, CEO of Private Healthcare Australia.
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