Health insurance bill draws criticism
By Jennifer Thompson
Federal health minister Carmen Lawrence's Health Legislation (Private Health Insurance Reform) Amendment Bill has drawn criticism from a wide range of doctors, specialists and health service organisations.
The Senate Community Affairs Legislation Committee, set up to inquire into the legislation in March, received 70 submissions, only one of which — from the Australian Health Insurance Association — was totally supportive of the legislation.
The legislation, designed to bolster private health insurance, requires insurance companies to negotiate contracts with private hospitals and doctors.
Despite the proliferation of private health insurance funds — there are now 88, operated by 49 registered organisations — health insurance premiums have increased at a much faster rate than inflation. A report released in March by the Australian Tax Research Foundation pointed to the annual family payments of one typical fund that rose between 1986 and 1993, by 176% in nominal terms and by 104% in real terms.
The Australian Medical Association has warned that the legislation will place medical decisions in the hands of profit-oriented and sometimes monopolistic private health insurance funds. It is organising meetings across Australia at which specialist doctors are being asked to boycott private contracts with health insurance companies. An April 30 meeting in Sydney drew 220 doctors, who called on the government to withdraw the legislation and promised to boycott private contracts.
Of greater concern is the effect the legislation and the government's drive to cut spending will have on the public health service. Labor's encouragement of private health insurance weakens support for public health and leads to two health systems — one for the poor and one for the rich.
Despite the government's drive to get more people into the private health system, people are voting with their feet. 43,000 dropped their private cover in the three months from December 1994, with a much larger number of people seeking treatment in the public hospital system.
The greatest threat to Medicare, which despite its limitations is by far the most efficient and equitable health service provider, is lack of government funding. The Australian Health Ministers' Advisory Committee has calculated that the cost of the increased burden on state public hospitals is between $45 million and $164 million per year. The federal health department secretary, Dr Stephen Duckett, has promised only an increase of $20 million.