CHOICE membership

Junk health insurance funded by the taxpayer


#21

Thanks for the consideration and discussion all, it’s much appreciated. I’ll be sure to pass on the differing viewpoints to my colleagues currently working on health insurance reform.


#22

Most of the debate about funding seems to centre on shifting the cost around.

  • shifting the cost from one taxpayer to another
  • shifting the cost from this generation to the next
  • shifting the cost between federal and state
  • shifting the cost between public and private

That ultimately isn’t very helpful.

Maybe we are better to focus on things that will reduce the cost

e.g. actually improve public health (diet, exercise, screening, preventative)

e.g. funding relevant medical research (that means spending money to save money)


#23

I agree with the preventative steps & funding of research. Most of the extra costs in the health system could be circumvented by taking steps to reduce the risk factors before they create the problems. For example if you stop the rising epidemic of obesity you can largely control Diabetes II and all it’s associated problems (including amputations, eyesight, renal and so on), Heart Issues, Sleep Aponea and a myriad of other related conditions. But we have a system that is hooked into the fix not prevent mentality…the current "you must have “b” condition before we will treat you rather than the “lets do “a” so we prevent “b” steps”.

Again much of this requires Govt policy and changing legislation so that it becomes possible.


#24

I would hope everyone would agree the US example is terrible and should be avoided.

Regarding shifting costs around, one opinion I share is that health care should be a universal service, and that shifts costs from the healthy to the unhealthy one way or the other, regardless of the path or accountant who signs payments off.

In the US system it is every person for themselves where the unhealthy do without, bankrupt, get charity, or pay impossibly high premiums IF they can get insurance at all (once Trump kills the ACA); while the healthy get perks and lower rates, noting employers in the US often pay a portion of health insurance as a job perk, especially for professional/white collar/higher income workers and their ‘group’ costs are lower than an individual’s street cost. Lose your job, lose your cover or pay lots more. OTOH sharing risk is what insurance is about so I do not agree it is basically ‘shifting costs’.

Re diet, exercise, etc, changing human behaviour is a noble goal but impossibly difficult as evidenced by smoking and others; funding research could beget drugs that are silver bullets, or prohibitively expensive, or that will themselves create a false sense of ‘oh well’ about what it is they can treat.

I am with @grahroll where it needs to restart from first principles and go from there.


#25

Research does not always have to find a new drug, it could be that a test is developed that allows better targeting of a particular therapy, procedure or preventative steps. Such tools are just as important as drugs that are found. Without the research they will not come to light.

The US system as has been said is broken in many ways and the tinkering has not fixed it (and many would say made it worse). I hope we do not eventually entertain that system here.

I do not think we can have a better system if we start with a faulty model and dress it up. It needs pulling apart and keep the parts that work, dump the ones that don’t, build better replacements and throughout it all be analytical, and methodical, not this skip from here to there approach we seem to have now.


#26

I thought about that too late, but knew someone would add it. Ta :slight_smile:


#27

A news article about the changes can be found here:

http://thenewdaily.com.au/money/your-budget/2017/10/13/health-insurance-reforms-doctors/

Choice gets a mention as well about the Junk Insurance policies “According to consumer advocate group CHOICE, junk policies are a growing problem.” and the AMA had a bit to say about them as well, AMA president Dr Michael Gannon was quoted in:
"He paid particular attention to so-called “junk policies” – that is, insurance products that offer only very limited cover.

“While we had called for the banning of so-called junk policies, we will watch closely to ensure that any junk policies that remain on the market are clearly described so that people know exactly what they are buying and are not subject to unexpected shocks of non-coverage for certain events or conditions,” Dr Gannon said."


#28

A newish article that appeared on the ABC site about the Healthcare Rebate:

Interestingly in the article it included a look at the Junk Policy users who buy policies to avoid the Medicare Levy Surcharge.

It also notes that there would be a Net benefit to Taxpayers in scrapping the Rebate and would, if the money was well spent in the Public Sector, improve the state of care for all Australians.

Tweeted the article with a link to the Choice article that started this thread. We as Australia should be taking a very hard look at what the rebates actually achieve other than a perception it may line the pockets of Health Insurance Companies and assist some policy holders just to avoid the Medicare Levy Surcharge. $6 Billion is a lot of money, so are we getting value for our Taxpayer dollars? My feeling is no.


#29

While we don’t recommend these policies for health cover, the following are the cheapest Basic cover policies that you can purchase for financial purposes.


#30

I know this is probably a really dumb question but the “AHM (Medibank) Starter Basic” policies for each State mentioned had different cost amounts in every earnings bracket. As Prof Sumner Miller used to utter “Why is it so?”.

For example

< $90k bracket

Policy cost

South Australia is $794
Tasmania is $817
Victoria is $839
Western Australia is $630

All had the same coverage details:

" The annual premium is after the private health insurance rebate has been applied. For couples and families, double the earning figures and annual premium cost.

Cover : Provides emergency ambulance cover and private hospital cover for treatment after an accident. Covers rehab, psychiatric in-hospital treatment and palliative care in public hospital.

Risks : No cover for other services.

Recommended? No"

I am boggled or even :confounded:


#31

You get a rebate on private health insurance based on your income. So the higher your income the smaller the rebate and the more you pay.

This is the debate at hand. Should the government be paying a rebate to health insurers for policies that don’t actually relieve pressure on the public system? (On the contrary, they increase it as they reduce the medicare levy payable)


#32

Sure I agree, but my post was in response to @BrendanMays post just above and why was there a monetary difference between States for the exact same policy. They are probably easily called ‘Junk Policies’ but they certainly would be used by those seeking to reduce the tax burden they would otherwise pay if they didn’t have one.

I get annoyed at the squandering in some cases of our tax dollars for rebates on junk policies so that someone else can reduce their tax debt at our expense. The policies I referenced in fact rely on the public health system to treat the policy holder for nearly all health concerns. Probably the only ‘real’ benefits are covering the emergency ambulance cost, the rehab and psychiatric in-hospital treatment and palliative care in public hospital & the private hospital cover after an accident. Still most of those benefits are in reality a function of the public system anyway.


#33

Oh sorry. The difference in state comes because their algorithm addresses risk factor on a per state basis. So if the average rate of a certain condition is higher in one state, that state has a higher premium. Logical, not always. But that’s how most insurance works


#34

The base costs also reflect the differences in costs of medical care in the private system in each state.


#35

Should the government be imposing a financial penalty to force ‘you’ into having health insurance?

These and other vexed questions (without simple answers).

One might imagine that without the financial penalty (the medicare levy surcharge), the junk health insurance options wouldn’t exist and the customers wouldn’t exist (as customers) and hence the rebate would not be being paid, so the taxpayer wouldn’t be paying for it.


#36

I read that last sentence 3 times now my brain hurts :rofl:


#37

I’ll reword then. :slight_smile:

The medicare levy surcharge causes there to be both a supply of and a demand for junk health insurance. That junk health insurance then gets subsidised by the taxpayer. Yet the medicare levy surcharge is not bringing in any revenue to the government, and is simply having the effect of altering behaviour.

Get rid of the medicare levy surcharge and those customers who want private health insurance and who will use it when necessary will still have it, but the supply of and demand for junk health insurance will disappear, so the question of whether junk health insurance is subsidised by the taxpayer no longer arises.