5AA Mornings program interview with Ben Harris on PHA’s 2020 budget submission to Treasury

Station: 5AA
Program: Mornings
Date: 17/01/2020
Time: 10:07 AM
Compere: Matthew Pantelis
Interviewee: Ben Harris, Director of Policy and Research, Private Healthcare Australia


MATTHEW PANTELIS: Starting off this hour on the Medicare levy and private health, because there’s a push to have private health insurance rebate restored to 30 per cent to encourage more people to take up cover, especially younger people – Private Healthcare Australia making the submission in a budget, or the suggestion in a budget submission. They’re also suggesting an increase in the Medicare levy for uninsured, high income earners. And as I’ve said before I look at my health insurance, it costs me just under 400 a month – what do a get for it, a pair of new specs every year that I still have to fork out $27 for and that’s because I’m choosing the cheapest option. I don’t know, I, just ridiculous.

But anyway, Ben Harris is Director of Policy and Research at Private Healthcare Australia. Ben thanks for your time, good morning to you.

BEN HARRIS: How are you?
MATTHEW PANTELIS: Yeah, very well thank you. So the budget submission you put forward, is this as a result of people bailing out, the numbers of people with Private Health Insurance just falling away?
BEN HARRIS: We’ve actually had an increase over the last few years of people with Private Health Insurance Mathew but what we’re finding is that younger people are dropping out and older people are joining up with Private Health Insurance. Now, you speak about not using your Private Health Insurance and I hope you continue to have good health and don’t need to use it.
BEN HARRIS: But what we find is older people, of course, end up with more claims. And in Australia we’ve got community rating where whether you’re young, old, regardless of your health you pay the same amount for health insurance so the balance of people in health insurance is really important. And it’s incredibly important to get younger people into Private Health Insurance. Younger people often underestimate their risk and we find this particularly an issue like mental health care. We’re finding more and more people claiming for mental health care, more and more people becoming more aware of their mental [indistinct] and if you, and people often overestimate the capacity of the public system. If you need mental health care or indeed any type of care in the public system often you’re in a bit, in for a rude shock about how long it’s going to take to get treatment.
MATTHEW PANTELIS: And that is, that is certainly the case. Is it the fact that younger people aren’t, well not as many younger people as you’d hope – I don’t know what the percentage is – have Private Health, that’s pushing up the premiums for everyone?
BEN HARRIS: That’s correct. So if we had more younger people in Private Healthcare then the premiums end up being lower for everyone.
MATTHEW PANTELIS: So what needs to change here? Your submission then to the Federal Government, lifting the Medicare levy, we’d all pay more then wouldn’t we? Including people with Private Healthcare and those of us who have it wouldn’t see premiums fall away.
BEN HARRIS: We’re actually recommending an increase to the Medicare levy surcharge for people on very high incomes who do not have Private Health Insurance. So we are not recommending an increase for everyone. We’re only recommending an increase for people who are earning more than $150,000 a year who do not have Private Health Insurance.
MATTHEW PANTELIS: And what would you like to see that increase be?
BEN HARRIS: We’d like to see that increased from 1.5 per cent to 2.5 per cent. We, our modelling suggests that tens of thousands of high income people would then choose to take out Private Health Insurance and if they didn’t the government would get a bit more revenue.
MATTHEW PANTELIS: Yeah. And so really they should because they’re benefiting from the private system or, alternatively, from having excellent health – good luck to them – then the rest of us are carrying their weight essentially when they turn up to a doctor in a public hospital.
BEN HARRIS: That’s exactly right. We know that we need to decrease the pressure on the public system and when very wealthy people end up in the public system that means that somebody with a greater need does not get the care they need.
MATTHEW PANTELIS: Mind you, it’s easy to see how they become wealthy given the way premiums are going with Private Health. But how long before you hear back from the government on this? Is this a short term process, your submission?
BEN HARRIS: We talk to the government constantly. This is a submission to the Treasury for the next budget in May.
MATTHEW PANTELIS: Okay, so it’s under consideration, active consideration at the moment you’d expect.
BEN HARRIS: We expect so.
MATTHEW PANTELIS: Private Hospitals Association – are you aligned with them at all? Do you speak with them? Have they come forward with anything?
BEN HARRIS: We speak to the Private Hospital Association regularly; we’re aligned on many things – not everything. We, they are also calling for the rebate on Private Health Insurance premiums to be increased back up to 30 per cent and they’re on board with the increase to the Medicare levy as well.
MATTHEW PANTELIS: What is the rebate now? What’s it dropped to?
BEN HARRIS: It’s dropped to slightly under 25 per cent.
BEN HARRIS: Through a very complicated formula change a few years ago the rebate has decreased from 30 per cent down to now under 25 per cent.
BEN HARRIS: We’d like to see it back to 30, where it was a few years ago.
MATTHEW PANTELIS: Yeah. Absolutely. So would I. At least. That would be good. And that’s probably why I felt the sting a little bit more in my premiums because they come out of my pay before I get my money and so I don’t sort of miss it as such but you know, I know it’s gone and I wouldn’t mind having an extra 400 bucks. But it ain’t gonna happen I don’t think.
BEN HARRIS: Well we had the lowest increase in premiums in almost 20 years this year, which is great news. But we need to make sure the premiums stay down, we need to keep an eye on costs and importantly, as you say, if we can increase the rebates then it means that people don’t feel as much of a sting in the back pocket.
MATTHEW PANTELIS: Absolutely. Ben, you’ve explained it all very well. Good luck with that submission, I hope it gets up. Thank you.
BEN HARRIS: Thank you Matthew.
MATTHEW PANTELIS: Ben Harris there, Director of Policy and Research at Private Healthcare Australia. They, as you’ve heard, put in a submission to the Federal Government to bring the health insurance rebate back up from 24 odd per cent to 30 per cent and to increase the Medicare levy surcharge for high income earners who earn more than 150,000 grand from 1.5 to 2.5 – that’s if they don’t have Private Health. And, you know, so they should, they should pay that little bit more. You can afford Private Health, you chose not to have it that’s well and good, that’s your choice but then you can expect to be, and you should expect to be whacked a little bit more through the Medicare levy – I totally am on board with that. So, either take out a policy – a private health cover policy – or pay a bit more to Medicare. That makes perfect sense to me if you can afford it and over 150,000 – you know what, who am I to say how you can afford it or not but I reckon on that sort of money you probably can.
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