Rebate Fails To Lift Cover
Sydney Morning Herald
Thursday November 4, 1999
The Federal Government's $1.7 billion health insurance rebate has failed to get more people to take out private health cover and has not been understood by most of the uninsured, a national survey of people's attitudes and practices on health care has revealed.
The report showed the 30 per cent reduction in private health insurance premiums funded by the Federal Government (the so-called 30 per cent rebate) had almost exclusively benefited people who already had private health insurance before it was introduced this year.
Only 38 per cent of people without private health insurance were even aware of the rebate, and only 7 per cent of the uninsured thought that the cost of private insurance had fallen in the past year.
The survey of 5,148 people, conducted by the Melbourne-based research company TQA Research in August this year, also found that more than 80 per cent of all the people questioned thought that private insurance premiums would increase by as much as, or more than, the rebate in the next two years.
The Opposition spokeswoman on health, Ms Jenny Macklin, said the survey's findings showed ``the beneficiaries of this massive public health expenditure has gone to people who already had private health insurance, so has done nothing to help the public hospital system".
``The benefit that would have flowed through to the public hospital system if this money had been put directly into the system is enormous by the comparison," she said.
But a spokesman for the Minister for Health, Dr Wooldridge, said the Government's intention with the rebate had always been to retain those with private insurance, rather than attract people who did not have insurance.
``We always intended to put a floor under the drop-out rate," he said. ``What we were doing was primarily making it more attractive to people who had it already."
He described the description of the rebate as an expensive failure as ``absolutely arrant nonsense".
``Go and ask the more than 53/4 million Australians with hospital cover who now find it 30 per cent cheaper if they find it a failure."
The survey showed 7 per cent of people who were very likely to withdraw from private health cover had kept it because of the rebate.
``While this can be regarded as a good result ... it nevertheless implies that the 30 per cent rebate is mainly going to those with private cover who would not have allowed their private cover to lapse anyway," the survey report says. ``The value-for-money achieved from the 30 per cent rebate should be reviewed in this context."
But Dr Wooldridge's spokesman said: ``We consider we have achieved something remarkable to make sure they stayed."
The survey was rather more optimistic about the results of lifetime health cover, a system due to be introduced in July next year in which people who take out insurance after the age of 30 will pay progressively higher premiums. It is due to be advertised in a multi-million-dollar campaign beginning in the new year.
If 90 per cent of the population heard about the scheme and understood it, the proportion of the population with hospital cover would increase by about 5 per cent to 35.1 per cent by August next year, the report estimates.
This year's report, which has gone to subscribers over the past week, also showed only 10 per cent of people with incomes over $50,000 for singles and $100,000 for couples had taken out private health insurance because of the extra Medicare surcharge the Federal Government applied to encourage more wealthy people into the private system.
© 1999 Sydney Morning Herald