Program: Live Now
Date: 1/2/2018
Time: 10:38 AM
Compere: Samantha Maiden
| SAMANTHA MAIDEN: | Now, the other big story obviously coming out of Bill Shorten’s year setting speech at the National Press Club earlier this week is this debate over private health insurance. He really opened fire on the private health insurance, saying that people felt like they were being ripped off. That then started this debate about whether he was prepared to tackle the rebate or not, he says he’s not going to change the rebate, should we trust him?
Well, joining us now live is Rachel David, the CEO of Private Healthcare Australia. Rachel, are you satisfied by Bill Shorten’s pledge that he is not going to touch the 30 per cent private health insurance rebate? |
| RACHEL DAVID: | I guess the health funds were a little perplexed by the speech by the leader of the Opposition, particularly as he described health insurance as being a con. To be clear, private health insurance pays for two-thirds of the elective surgery that occurs in Australia, more than half the mental health admissions, and most of the dental care that occurs in Australia. So, we know from repeated research that 80 per cent of the people that have private health insurance and that access these services are pretty grateful to have it and be able to access these services in an affordable way, and on time. They certainly don’t see it as being a con.
Now, no one likes rising costs and rising premiums and so, people are rightly concerned about any discussion about the PHI rebate. The PHI rebate is paid to individuals and their families on lower incomes to enable them to afford health insurance; it does not get paid to the health funds. And we need to be clear that millions of people that access the rebate are actually pensioners and superannuants on incomes of less than $50,000 a year; they certainly can’t afford to see the rebate fall any further than it is already because that’s already meaning that they’re having to pay more in addition to premium increases every year. |
| SAMANTHA MAIDEN: | Okay, so you’re pretty good at reading the tea leaves, you’ve had a listen to the noises that Catherine King has been making, for example, into so-called junk health fund policies. What do you think Labor’s going to do, though? They’re saying that they are looking at changes in this space, what are their options? |
| RACHEL DAVID: | Well look, the basic table or lower cost health policies have been around for a very long time, it’s not a new phenomenon. There’s been a basic table since the ’60s and ’70s. And for the most part, the people that have been on those older policies are low income people living in regional areas who want continuity of care from their particular medical specialist who looks after their health condition but can’t afford to have that access to care in multiple private hospitals so they get that care in a public hospital, that group’s been relatively fixed over the years and it would be really disastrous for them to be forced to pay a higher premium because that basic table was removed. In addition, there’s a group of younger people that also purchase low cost policies so they don’t need to pay the Medicare Levy Surcharge, and for the most part those people end up upgrading to a higher cost product when their life circumstances change, like when they have a baby they contribute to the health fund risk pool which means that premiums stay lower for everyone.
So, the detailed analysis that was done by the funds, and was repeated by the Department of Health, showed that if you remove the basic table and make all policies inclusive of all treatment areas in all settings, premiums will go up by a minimum of 16 per cent. And that’s going to hit those people in those lower income groups very hard and the message will be very difficult, particularly if they’re told they now have to pay for treatments they believe they don’t need. So, you’d need to go out and say to a bunch older people over 50 on lower incomes: now you have to pay for pregnancy and IVF, I don’t think the public’s going to wear that, I think once the ALP understands the numbers and understands the context they’ll be a lot less keen to eliminate those policies. |
| SAMANTHA MAIDEN: | Okay, just finally though, surely it is a fair criticism if Labor has suggested that these reforms that were designed to put downward pressure on premiums – I think that they saved about $1 billion out of the system, including through reform to prostheses and so on – you haven’t actually delivered $1 billion in savings to your customers, have you? |
| RACHEL DAVID: | Well, the prostheses changes delivered $1 billion in savings over four years, or $300 million per year. Every dollar of that has been passed on to consumers in this premium round, that’s been documented by our regulators, the Department of Health, and APRA. The premiums are going up for one reason and one reason only, and that’s because health funds are paying for more healthcare. So, just last year alone, there were 25,000 additional chemotherapy treatments for cancer, 13,000 additional stroke treatments, 4500 additional mental health admissions, and the list goes on and on. It’s the same for the public system, there costs are rising at 7 per cent per annum, and we’re actually well below that because of the efficiencies of the private sector.
So, to be able to address premium increases as our population ages, and the availability of medical technology increases, we actually need to be smarter than just bashing up one part of the sector or another, we need to look at what’s driving up the costs and make sure that we’re not paying for medical treatments that don’t work, or that we’re not overpaying for things like medical devices which is the issue the Government’s tried to tackle. |
| SAMANTHA MAIDEN: | Okay, Rachel David in Sydney, I think that we’re going to be talking about this a lot for the rest of the year, thank you very much, though, for your time and your insights today. |
| RACHEL DAVID: | Thanks. |
| * * END * * | |