Poor Health Is the True Cost of Expensive Insurance in Australia
lower rebate for them, as the fiscal year turns. To boot, health funds have been hard at work trying to make the new changes as transparent as possible, in order to avoid losing customers out of a perceived lack of effort to inform them of price hikes. However, as most private health insurance analysts surmise, there is bound to be some surprise as the rebate is collected by policyholders. The average value of a rebate previously stood at $2,500 and is expected to drop by up to 30 per cent, with some policyholders even liable to pay a tax bill.
As the government is still encouraging consumers to shop around for better deals on private health insurance, taxation experts and accountants explain that there are still plenty of ways to reduce the amount of taxable income within a household. Income earners who have fallen into a different rebate bracket with the rollout of the means testing mechanism can choose to negatively gear their income into investments, donate some of it, or deduce some expenses as work-related. Yet, aside from cost issues, some detractors of the government’s savings reforms believe that the most dramatic result of the cost hikes is the effect they will bear on the public health insurance and, implicitly, the public health care system.
One pensioner cited by The Advocate explains that the recent premium increases have upped his health insurance bill by $18 per week – adding up to a total of $937 each year, which many pensioners might find too steep to cover out of their disposable income. This man believes that more and more former private insurance policyholders will choose to turn to the private Medicare system once more. This, of course, will prolong waiting lists for medical services and generally have a negative impact on a system that has already been described as overstretched. Among those who believe otherwise stands Health Minister Tanya Plibersek, who has repeatedly downplayed the dropout and downgrade rate the system will experience.
What’s more, Plibersek has supported the federal government’s decision to up costs by explaining that the private health insurance rebate had reached non-sustainable margins. Before implementing means testing and other cost-cutting reforms, the bill for the rebate had reached $5 billion per year and, according to the minister’s statements, would have continued to grow up to $8 billion in 2022. Aside from slashing the rebate, the federal Labor government also decided to cut the rebate on the loading for people who delay taking out hospital coverage past the age of thirty. This is yet another incentive which Plibersek deemed unsustainable in the long run and likened to the case in which the government would be paying fines incurred by consumers.
While there is certainly an ounce of truth to the reasoning behind Plibersek’s statements, the reality for many consumers remains one of premiums they cannot afford. A group of parents in Hunter, interviewed by The Herald¸ explained they often found themselves putting their children’s needs ahead of their own health care needs. Interestingly enough, the area has one of the highest rates of chronic disease incidence, which, at 53 per cent, far surpasses the national average. Health care costs have also been assessed as higher than in other areas of the country, which, in turn, has determined more locals to avoid seeking out dental and medical care, for fear out of out-of-pocket costs.
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Category: Health
