Tuesday, 2 June 2009
Fairer Private Health Insurance Incentives Bill 2009; Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009; Fairer Private Health Insurance Incentives (Medicare Levy Surcharge — Fringe Benefits) Bill 2009
The government’s plan to remove incentives for Australians to take up private health insurance is another nail in the coffin of Australia’s health system. The so-called Fairer Private Health Insurance Incentives Bill 2009 and its accompanying legislation actually remove incentive for most Australians and take our private health insurance into very doubtful areas. Make no mistake; these measures will impact on all Australians, not just the ones immediately affected. I will show how that will occur.
Insured Australians who earn over $75,000 a year will pay more because of the cut in the private health insurance rebate. If they drop out altogether they will still pay more due to the increased Medicare levy surcharge. Insured Australians who earn under $75,000 will pay more because of increased premiums due to the younger and healthier people dropping out. It is estimated that premiums will increase by about 10 per cent or even more a year, compared to the five and six per cent that we have seen over recent years. Uninsured Australians will be waiting longer in public hospital queues for essential treatment because of the influx of more Australians from the private to the public system. This is a no-brainer; we all know that that is going to happen, but somehow we keep our heads in the sand and pretend it is not.
The government likes to call it the carrot-and-stick approach. Because it is estimated that one million Australians will reduce their cover, there are clearly very few carrots and one almighty stick. I personally find it quite galling as I was one of the ones who got the health insurance rebate increased for people at 65 and 70; in fact, I argued in the party room for a 45 per cent rebate, but because of the cost it was kept at 35 per cent at 65 years of age and 40 per cent at 70. It has proved a boon, especially for self-funded retirees and pensioners who want to stay self-insured. Of course, it is a very confusing system that has been left since then.
Since 1996 private health insurance in my electorate has gone from 31 per cent to 42 per cent. It is a stunning outcome for a seat that is regularly described as ‘challenged’. Because of our relatively low income and relatively high unemployment, that was quite an achievement. Almost 38,500 adults living in Hervey Bay, Howard, Childers, Bundaberg and the other communities in my area have private health insurance as a priority in their personal budgets, and they work exceptionally hard to afford it, knowing that it is in their best interest. They know that holding private health insurance helps reduce the demand on the public hospital system, and I applaud each and every constituent of mine who has made the decision to help provide for their own health care.
Under Labor’s idea of means testing the insurance rebate, these families and individuals, who already scrimp and save to pay for their private health cover, are going to be financially whacked, whether through the lower rebates or the higher premiums when those who cannot afford it drop out. The impact will be quite severe. The CEO of the Australian Private Hospitals Association, Michael Roff, described the charges as:
… a clear breach of election promises made by the Rudd Government.
He said they would:
… lead to a system that is confusing, complex and costly for those millions of Australians who take responsibility for their own health care costs.
He went on to say:
The current system of rebates is simple, transparent and easy to understand. The new proposals introduce 10 different levels of entitlement or surcharge depending on income level and age. It will be difficult for people to work out their entitlement and will create a huge administrative burden both on Government and health funds.
On the other hand we have the Minister for Health and Ageing, who says these measures will provide a ‘fairer distribution of benefits’ under a ‘mixed model of balanced private and public health services’—all the while saving the government $1.9 billion over four years. The minister also thinks that only 25,000 people will drop out of private health insurance, and by her estimation this will result in 8,000 public hospital admissions over two years. I will be surprised if it is that low. In fact, she described the impact of these changes to be ‘insignificant’. I would like to agree with her, but I am sure those figures will not stack up.
The Australian Health Insurance Association has analysed the 2009 budget figures in conjunction with industry data and research conducted by Roy Morgan Research and Ipsos, and it calculates that up to a million people will either downgrade their coverage or drop out of coverage altogether because of Labor’s idea of dismantling the existing 30 per cent rebate. The AHIA has produced actual hard figures: 241,000 will drop their coverage and about 728,000 will downgrade their coverage. That is pretty close to a million. The AHIA chief executive officer, Michael Armitage, had this to say when releasing the figures:
Every Australian knows that you can’t take $1.9 billion from the pockets of people paying for their own health care by taking out private health insurance, and not have a major impact on private health insurance.
… … …
The impact of one million people leaving or downgrading their cover will mean that the premiums of everyone else remaining in private cover will have to increase, so that premium increases will also have a significant impact on those people with incomes of less than $75,000.
Clearly, the government’s decision to means test the private health insurance rebate is another example of short-sightedness when it comes to looking after the health of our fellow Australians.
The Prime Minister, who said, ‘The buck stops with me,’ promised many times during the election campaign that he would retain and protect the private health insurance rebate—and within 18 months he has broken that pledge. I have six quotes here from the health minister and the Prime Minister where they clearly say that they are going to retain the health insurance rebate, but I know we are trying to save time tonight so I will just bring one to your attention. The health minister said:
The government is firmly committed to retaining the existing private health insurance rebates.
What is significant about that is that it was said on 24 February this year. At that time the government would actually have been drafting the budget. Quite frankly, I think it is disgraceful. In other words, the public were lied to, and then, when the government wanted its way, it did what it wanted to anyhow. So we now have a government that wants to slash rebates, forcing people to leave the system and pay even more for their health coverage.
What also concerns me is the health minister’s statement that there have been ‘significant developments’ and ‘positive signs of improvement’ in public hospitals. It certainly is not the case in Queensland, and it is not the case in New South Wales, as you well know, Madam Deputy Speaker Bird, because you come from a state where some of the health councils cannot pay their month-to-month bills. In Queensland in the three months to 31 December last year compared to the same quarter of 2007, Queensland hospitals experienced a 3.2 per cent increase—that is 11,744 more patients—in the number of people treated in emergency departments, a 5.9 per cent increase in the number of people admitted to hospital, an 8.4 per cent increase in the number admitted for same-day care and a 3.6 per cent increase in the number of people admitted for more than one day. As recently as March this year the AMAQ reported that the Queensland health system was still plagued with ongoing problems such as severe shortages of acute, emergency and overnight public hospital beds, staff shortages, high bed occupancy and declines in the standard of workplace facilities. Seriously, does that sound like a system that is on the improve?
Further, Queensland’s public hospital performance report for the December quarter of 2008 showed that more than 7,000 people were languishing on surgery waiting lists and—believe this or not—259 category 1 patients were waiting longer than 30 days for surgery. And this is the system that the Rudd government promised to fix: ‘The blame game is over. The states are in our pocket. We’re going to do all these things and everything will be sweetness and light.’ That is what we were told before the election. Look what we have got now: an even bigger mess, with tens of millions of dollars being poured into an endless bucket. How on earth can the public system cope when we are going to put up to another million people out of private health insurance into the public system?
The Bundaberg Base Hospital and its staff have gone through their fair share of trauma in recent years, and the revolving door of Queensland health ministers, all of whom have strived to defend their position, is quite sickening. As always, the statistics that are trotted out to illustrate improvements in the hospital’s staffing numbers are little more than shallow spin. Earlier this year, the then health minister, Stephen Robertson, claimed that 33 more doctors and 111 more nurses had been employed at the Bundaberg hospital since 2006, giving the impression that the hospital’s capacity had improved markedly. Sadly, there have been an additional 144 names on the payroll but they are not all working full time. For example, while there are seven anaesthetists working at the hospital, they are working an average of 6½ hours a week—note that: 6½ hours a week. The minister also boasted that there were nine—note this: nine—paediatric specialists at Bundaberg hospital, but he failed to report that they were working an average of 156 minutes—that is 2½ hours—a week. I will wind up on this point because I understand we want to keep the contributions in this debate short. So, to summarise, what I would like to see is the staff numbers put out by Queensland Health reduced to full-time equivalents. I think they would then be embarrassingly low.
In saying all these things, I want to make one thing very clear. I do not reflect in any way on the dedicated staff of the Bundaberg hospital, especially the medical and nursing staff and ancillary staff. They put in a superb effort. My argument is for their hospital to be granted appropriate staff resources and facilities so that it can function properly. If ever a hospital in Australia has had a bad time since the start of the Patel era, Bundaberg has. It deserves special attention. Back in 2006 the state Labor government promised a $4.1 million upgrade to the hospital in the wake of the ‘Dr Death’ scandal. But, since then, the Queensland Labor government has only budgeted $9 million of the works over the last two state budgets, so the job that was meant to be completed early in 2008 is clearly going to be many years behind schedule. Although there is talk of another tranche of work to start shortly, we are already 17 to 18 months behind on the government’s promise. Meanwhile, the population of Bundaberg and surrounding areas continues to grow. It is much the same in the other parts of my electorate, with Hervey Bay facing challenges. I think Labor have a lot to answer for. They promised a new era of health care. All we have seen are cutbacks, and a pathetic lack of performance by their state colleagues.