1,000 A Day Quit Their Private Health Insurance
Sydney Morning Herald
Thursday August 21, 1997
One thousand people a day deserted their private health cover in the three months leading up to the start of the Federal Government's billion dollar-plus tax rescue package for the industry.
The figures were released yesterday by the Private Health Insurance Administration Council. Only 31.9 per cent of the population now has private cover, compared with 50 per cent in 1984.
The fallout from private health has been five times as great in the past six months as it was in the previous six months, despite widespread publicity given to the Government's package of tax incentives and penalties to encourage more people to take out health insurance.
The Federal Health Minister, Dr Wooldridge, launched a $2 million advertising campaign in April to promote the scheme, which includes a tax penalty for single people earning more than $70,000 and couples earning more than $100,000. To avoid the 1 per cent Medicare levy surcharge, new members were told to join up before the July cut-off date.
The Federal Opposition health spokesman, Mr Michael Lee, said the latest figures proved the Government's tax rescue scheme for the industry was a lemon.
"The tragedy is that the tax rebate was funded by billion-dollar cuts in public hospitals, dental health care and the Pharmaceutical Benefits Scheme," he said.
Dr Wooldridge's office said yesterday that the drop predated the television advertising campaign to promote the changes and the July 1 start-up day for new members avoiding the Medicare surcharge.
"The June figures reflect the same factors that have been in the market for most of the last seven years, namely concern about the cost of private health cover and dissatisfaction with aspects of the product, especially the large out-of-pocket expenses people face from specialists and surgeons," Dr Wooldridge said.
But the Australian Medical Association said it would not sign contracts with either hospitals or funds, which would eliminate the need for patients to pay anything extra to cover the doctor's fee, despite Dr Wooldridge's offer this week to amend legislation to protect doctors from any clinical interference. "The doctor's only allegiance is to their patient - not to a third party hell-bent on rationing care," said the Federal president of the AMA, Dr Keith Woollard. But a spokesman for Dr Wooldridge urged the AMA to "come to the party" and stop resisting change. "Thirteen per cent of those who drop out of private health insurance do so because of the gap," he said.
"The AMA must wake up to the fact that their stubborn resistance to change may end up killing the golden goose."
The insurance industry was cautious about whether the members who joined in July to avoid the surcharge would have a long-term impact on membership. Mr David Jones, the national public affairs director for MBF, said new members had doubled in July. "This was nearly all high-income earners who joined to avoid the surcharge," he said. This had now started to tail off.
"We will not know until we see the figures for the end of September whether this was merely a tempering of the decline and how this will play out industry-wide in the long term."
© 1997 Sydney Morning Herald