The private health insurance (PHI) rebate has caused no short supply of debate.
The rebate allows Australians covered by a private health insurance policy to claim back a proportion of their premiums, making the option more affordable for thousands of families.
For example, a person who is under the age of 65 and earns less than $90,000 a year can claim almost a third (29.04 per cent) of their premiums back as a rebate. Similarly, those in the same financial situation and over 70 years of age will be in line for a 38.72 per cent rebate.
Meanwhile, anyone who earns more than $140,001 will be ineligible to claim any of their premiums back, due to the means tested nature of the initiative.
However, some say the scheme is biased and is crippling the public health sector.
Last week, the Australian Council of Social Service (ACOSS) hit out at the PHI rebate, with CEO Dr Cassandra Goldie saying: "The government needs to start again on health policy, and give top priority to supporting a decent universal health system, which is cost-effective," she explained.
Counterattacking this sentiment, YouShouldKnow – a website designed to inform people on private health insurance matters – said the PHI rebate is essential for easing the pressure placed on public facilities. What's more, it called the ACOSS demands "irresponsible" and its information "false".
Taking the burden from public health departments
Around 41 per cent of all procedures occur in private hospitals, according to the Australian Institute of Health and Welfare (AIHW). The private health industry also takes the majority of the weight when it comes to major operations.
"The private sector plays a key role in Australia's health system, with 58 per cent of surgical procedures carried out in private hospitals," YouShouldKnow explained late last month.
In fact, PHI facilities are also the major treatment providers for the following procedures, according to AIHW statistics:
- Same day mental health treatments – 81 per cent
- Knee procedures – 78 per cent
- Complex middle ear infection – 72 per cent
- Lens procedures – 71 per cent
- Other major joint replacement and limb reattachment – 64 per cent
- Cancer therapy (chemotherapy) – 60 per cent
- Hip replacements – 57 per cent
- Major procedures for malign breast conditions – 55 per cent.
YouShouldKnow continued: "If people were not encouraged to purchase private health insurance by the rebate, many of these non-discretionary treatments would need to be done in public hospitals."
Helping poorer families?
Some experts say that scrapping the PHI rebate will make these procedures largely unaffordable.
The Health Insurance Restricted Membership Association of Australia (hirmaa) denounced ACOSS's call for reform, with CEO Matthew Koce believing it would lower the quality of care for poorer communities.
"ACOSS would do well to consult industry figures showing that private health covers almost 50 per cent of the population, paying almost $17 billion in benefits each year, before calling judgment on the effectiveness of the rebate", said Mr Koce.
"It is worth noting that many of these families certainly are not the most well-off in society; in fact, those with the lowest incomes have by far the most to lose."
What's more, experts tend to agree that scrapping the PHI rebate at this stage will send more people to already overburdened public hospitals – particularly those people unable to afford private care.
Public hospitals struggling
Australian emergency departments already appear to be struggling from swelling admissions and a greater number of people seeking urgent attention rather than waiting to see their GP.
In perhaps the most high-profile example of this, Blacktown Hospital in Sydney last month confirmed that a 63-year-old woman had waited for 30 hours to leave the facility's emergency department for a ward after being admitted with gastroenteritis.
"Changes to the health insurance rebate would put significant pressure on many families to drop their cover or downgrade to lower-cover policies, putting more pressure on the already overstretched public system," Mr Koce concluded.
Are you split between public and private health care, or confused by the difference? Your health insurance broker will be able to explain the differences and advise you on a level of insurance that meets your needs.
Call HICA today on 1300 44 22 01 for impartial and expert advice.