Election 2018

Medicare privatisation

Despite all the Coalition government’s denials to the contrary, it still plans to privatise Medicare. With a federal election to be called later this year, behind the scenes the parasitic private health insurance (PHI) industry is gearing up to take over Medicare. Privatisation of Medicare was a big issue in the 2016 general election and is shaping up to be of concern to voters in the next.

The Prime Minister is deliberately confusing voters on what is meant by privatisation. By limiting the definition of “privatisation” to selling off Medicare or parts of it, the PM is being less than honest.

At present the PHI funds are prohibited from providing cover for Medicare items. They are pushing hard to get their grubby hands on Medicare and Turnbull is a willing partner. The governments plans to contract out the Medicare payments system to the private sector – in other words its privatisation. When those proposals were leaked, public pressure and an election forced the government to pull its head in for the time being.

The PHI industry has undergone a series of take overs and mergers. HCF and HBF, both not-for-profit funds, are about to merge. The resulting fund hopes to be able to contain premiums using its greater market power to compete with the big for-profit outfits.

It would have around 18.4 percent of the market, in third place behind the for-profit BUPA and Medibank Private, both of which have around 27 percent. Along with NIB, four funds would dominate over 80 percent of the industry, giving them a powerful monopoly.

Takeover of Medicare

The Coalition’s policy, a continuation of the Howard government’s unfinished agenda, will not only open the way for the private health industry (PHI) to move into areas currently covered by Medicare. It will also normalise co-payments to see the doctor or have blood tests, X-rays and other examinations.

The government with the assistance of the mass media, is feeding the public with a constant barrage of myths about runaway costs of Medicare, unaffordability of the Pharmaceutical Benefits Scheme, the importance of “price signals” to contain costs, how supporting the private system will ease public costs and the need to relieve pressure on the public hospital system.

All the while it can find billions of dollars for corporate tax cuts and an arms race to fight the US’s dirty wars.

Former Prime Minister Tony Abbott’s aborted attempt to introduce a $7 co-payment for Medicare services was to be the thin edge of the wedge to abolishing bulk billing. The $7 would creep up with every budget, just as student fees have risen from an initial $250 “administration fee” to tens of thousands of dollars.

We have already seen the cost of prescription medications rise with a patient contribution of up to $39.50 per script and $6.40 for commonwealth concession card-holders. This is almost double the amount paid 20 years ago.

When Medicare was set up, the Medicare rebate to general practitioners was 85 percent of the AMA recommended fee. Today it is close to half the recommended fee. Successive governments, Liberal and Labor have starved bulk-billing doctors of income with years of frozen rebates.

Many GPs are reluctantly abandoning bulk billing just to make their practice viable. In other words, the doctors are forced to do the dirty work and take the rap for introducing a co-payment instead of the government.

This is nothing less than a major step in privatisation of our health system as a greater percentage of healthcare spending comes from the pocket of the patient.

Private health insurance con

The Howard government introduced measures to scare people into taking out private health insurance. They were told they could have the doctor of their choice, be treated in the hospital of their choice, get better quality of care and the biggest carrot was no queuing on a long waiting list.

There was also an additional “incentive” to join before the age of 30 after which there would be a loading on premiums if they did not. The aim was to attract younger members who would be less likely to make claims and hence swell profits.

Of course, the promises did not always live up to expectations. The PHI funds did deals with specific hospitals or hospital chains. If you didn’t use one of these hospitals then you might receive a hefty bill of thousands of dollars. And if you did choose one of their favoured hospitals there was the possibility that the surgeon you chose did not practise there.

At the same time, public hospitals are being run into the ground with chronic under-staffing and closure of beds, resulting in longer queues. Underpaid and overworked staff are trying to cope with impossible workloads.

For anyone taking out private cover, the system is a nightmare with literally thousands of possible policy options ranging from junk cover to full cover; from capped to uncapped benefits; varying policy excesses to be paid by the patient; and different premiums.

There are 27 private health insurance companies, including a number of industry funds such as the Railway & Transport, Teachers, Police, Defence, Doctors, and some other small funds linked to corporations. They tend to be not-for-profit mutuals that have lower operating costs, higher benefits and smaller profits. They operate in the interests of their members.

Highway robbery

The total paid in premiums to the private funds in 2016-17 was more than $23 billion. Just over $16.6 billion of this was spent on hospital cover and $6.5 billion on general (extras such as physiotherapy, dental, etc and ambulance) cover. The government contribution through the tax rebate was close to $6.3 billion.

Thus families, workers and other individuals spent a total of $16.7 billion on PHI!

Far from easing the pressure on public hospitals, the private hospital system is draining government coffers of $6.3 billion that could have been spent on the public hospital system.

These are annual, not one-off payments.

Patients received a total of $19.6 billion in benefits. According to the Grattan Institute only 17 percent of policies had no gaps and a quarter of patients had out-of-pocket expenses of more than $5,000.

It would be interesting to know the total out-of-pocket expenses paid. There are cases of people with private cover losing their homes to cover bills. (Statistics from APRA)

Nationalised health care

The Communist Party of Australia supports accessible quality medical and dental treatment for all Australians, bulkbilled under Medicare, centrally funded through progressive forms of taxation and focused on the needs of working Australians and their families, the elderly and the sick.

It also calls for an end to the privatisation of Australia’s health system and, in the meantime, an immediate end to the wasteful private health insurance rebate which is driving further privatisation of Australia’s health system and which will lead to rationing of health care for those who need it and means-testing of public hospitals.

A full policy statement is available on the CPA website. Click on Resources and then Policies.