Pay Health Fee Rises Or Quit: Abbott
Sydney Morning Herald
Saturday February 25, 2006
HEALTH insurance premiums will increase for the fifth successive year, but the minister responsible, Tony Abbott, says: "If you don't like private health insurance, you don't have to have it."
Dismissing criticism about the rises of just under 6 per cent, Mr Abbott has reminded consumers that it would cost significantly more without the minimum 30 per cent rebates introduced by the Howard Government."The price of milk can go up, the price of motor cars can go up, but somehow the price of private health insurance is never allowed to go up, or if it does it's some kind of a national disgrace," Mr Abbott told Channel Nine last night. "If they think they are paying too much - and I would remind them that they are paying a lot less than would otherwise be the case, thanks to the Federal Government - but if they think they are paying too much, they don't have to keep up the product."Along with rebates for policyholders, however, the Howard Government introduced levies which penalise high-income earners who choose not to take up private health insurance. The new rates, to apply from April or May, mean health insurance premiums have risen by at least 33 per cent over the past five years.Despite the upward price spiral, the Health Minister signed off on the premium increases, boasting that for the first time since 2001, the rate of increase had fallen below 6 per cent. He said it would increase the cost of a combined hospital and ancillary policy for a family by about $3 a week, although commentators put the rise at closer to $10 a week. Health economists and consumer groups expressed dismay at the jump.Glenn Salkeld, health economist at the University of Sydney, warned that the people who would drop out of private health insurance because of price rises were usually the young and fit, meaning the risk profile of health funds increased as its membership moved into an older and sicker bracket. "The real issue is what checks or brakes do we have on the price of health care - quite apart from the question of what we are getting from our $3 billion private health rebate."Premiums increased by an average of almost 8 per cent in 2004-05 after similar rises in the two previous years.Better agreements between health funds and hospitals would help keep costs under control, while the Government should ensure the private health rebate was tied to demonstrable efficiencies in the sector, Mr Salkeld said. The health policy officer at the Australian Consumers Association, Viola Korczak, said, "Consumers are not getting value for the money - they are paying more, but still receiving roughly the same benefits."Since 2001 private health insurance membership had dropped by 2 per cent. In that time, 477,000 people aged up to 54 years had left, while 445,000 aged over 55 had joined.
© 2006 Sydney Morning Herald