Parlous Community Health Insurance in Australia

With the introduction of the original Medicare scheme by Gough Whitlam in the early seventies, it was the general hope that Australia would be ushered into a new era of public health insurance for all, met by a levy on all tax payers, this, it was hoped, would ensure that no-one in Australia would experience sub standard access to necessary health care. With the defeat of the original Labor government, successive liberal and labor governments have meddled with the original scheme, so that today we now find ourselves with a two tier scheme consisting of a minimal health insurance scheme for the uninsured public, and a private health insurance scheme targeting that proportion of the population that can afford it, which by and large is run as a profit making enterprise by various companies. At the time undoubtedly vigorous lobbying by companies in the industry set the tone of how the system would be run to ensure that it would operate to the benefit of the industry first and foremost, while paying lip service to the needs of the Australian public. What began as a noble and just cause by Whitlam was soon dismantled and degraded by the self interest of the free enterprise cowboys.

Today, we are faced with a two tier system of private health insurance cover which is supposed to guarantee that a person has access to the best possible medical facilities and a long line of people who are just as much in need of those facilities, but who simply do not have the financial power to access them, and are therefore, faced with long public health queues. Scaremongering continues to drive more working Australians into the arms of private health insurers and any attempt to reign in the excesses of companies in the sector was abandoned long ago when the Government privatised its insurer, Medibank. The current state of affairs is tantamount to a cynical exploitation by private enterprise, to bleed as many members of the Australian public as possible whilst offering as little as possible, in return.

The reason for this is two-fold. People are encouraged to take out health insurance at an age when they become members of the workforce and by and large in good health, a time when they, have, statistically, very little need for the insurance the companies provide. However, once these people retire just at a time when their access to the health services will start to increase, they are no longer able to afford the premiums, and are, therefore, denied the insurance they have paid for so many years. This leads to the interesting situation of someone who may have worked thirty plus years, during which time they made relatively little use of the insurance scheme, then find themselves debarred from accessing it because of their inability to afford the premiums in retirement.

Of course, the insurance companies will tell you that their mission in life is to ensure the best possible health coverage for their members, but they normally gloss over the fact that once you are no longer able to pay your premiums, you are automatically no longer a member either, and therefore, their concern for your health and wellbeing, evaporates. Undoubtedly, these companies who have enriched themselves in this system are also influencing governments to increasingly raise premiums because it is in their own economic interest to do so, and as we have seen in recent rises, they are able to do so beyond the increase in the CPI, which in itself hints at a cynical exploitation of their members. Furthermore, even those of us fortunate enough to be able to afford the highest premiums, and would therefore expect to be fully covered, will find that a percentage of the costs associated with any medical treatment will still be sheeted home to themselves, as the insurance companies seldom, if at all, cover one hundred percent of all medical expenses incurred.

One needs to ask the question, when increases in health insurance premiums are announced, to what extent companies in the industry influence the determination of these premiums? Can they be traced back to the profit making organisations in the health insurance industry, in other words, are the government bureaucrats who determine that the permissible rise in health premiums unduly influenced by the commercial interests of the profit making health insurance companies?

Whether this is occurring or not, is more difficult to find out than one could imagine. Try Googling who sets health insurance premiums in Australia and your search query will come back with zero results. Try any combination of these or try to look through the Health Insurance Act, to determine how actual details of how insurance premiums are set, (supposedly in the interest of all Australians); it is simply not readily available. It begs the question, whether we ought to look at the post Public Service careers of some of our health bureaucrats?

Similarly, not all companies offering health insurance are run for a profit, there are some middle funds etc., which purport to be non profit, and are run for their members. This is all well and good; however, when we look at premium movements, even these organisations tend to follow fairly closely the premium rises put forward by the profit based health insurance companies. They may well argue that by doing so, they can better support their members, but again, one needs to bear in mind that one can only be a member of these funds, as long as you have the capacity to pay. Once that finishes, you revert back to the public health system, whether you have been a lifelong diligent member of the fund, or not.

For any person starting out in the Australian workforce, I would urge you to set up a savings account and into that account pay the premium you would normally pay to your insurance company religiously. You will find that by doing this, not only will you accumulate quite a large amount, it will earn you interest, and once you have a reasonable sum in there, accessing the short term deposit market will ensure that you earn even higher interest, and then at the end of your working life, start drawing on this nest egg, to provide for the medical necessities you will face towards the end of your life. Meanwhile, during your years in the workforce, access the public health system as much as possible, and only touch your nest egg at those times where you have no alternative. I would argue that by and large, you will be better off following this course of action than to throw your money at an insurance company which will simply disown you the moment you are unable to maintain your premiums.