The private health insurance scam

Private health insurance is a monumental rip-off that does nothing to deliver better health outcomes. Quite the opposite – it serves only to undermine public health.

The only outcome the health insurance parasites are concerned about is the health of their bottom lines. Money desperately needed to improve the public hospital system is siphoned off to boost the profits of private funds.

The annual federal government subsidy to prop up the declining memberships of the private health insurance companies is a monumental $6.4 billion. And they are crying out for even more.

Private health insurance doesn’t save lives. Nurses, doctors and other medical staff do that. What private health insurance does effectively is deliver record profits to the big three funds – Medibank/ahm, Bupa and nib – and huge salaries to the top executives managing them.

Data from the Australian Prudential Regulation Authority show profits across the private health insurance industry over the year to April 2017 surged 18 percent to $1.3 billion, on the back of ongoing premium hikes.

Out-of-pocket expenses for policy holders, the difference between the health insurer’s refund and the fees the health provider charges, rose 4.3 percent for hospital care and 3.5 percent for ancillary services.

Private health insurance premiums will go up a further 4 percent on average in April. The Turnbull government is trumpeting this as the lowest increase in 17 years, but it is still twice the rate of wage increases. And over the last five years, the cost of the average health insurance policy has risen 30 percent.

Research conducted by IPSOS Mori revealed that, after the upcoming 4 percent premium increase, the average family/couple will pay approximately $4,200 a year for a combined hospital and extras policy, up from $4,040. A single person will have to fork out approximately $2,474 a year for a combined hospital and extras policy, up from $2,380.

The insurance funds and their Liberal Party backers attempt to justify these massive subsidies on the basis that they encourage people to use private hospitals and other private health providers and reduce pressure on the public hospital system.

This is absolute rubbish. If all the money spent on private health insurance was put into the public system, we would have a first class health system that benefited everyone.

The Liberals and their rich mates have always been opposed to the public health system. They consistently fought against the establishment of Medicare. It has survived only because workers and unions fought hard to defend it.

The Liberals know that, because of the popularity of Medicare and the free public hospital system, they can’t just abolish it overnight. Their strategy has been to run it down, to limit the range of medical services covered by Medicare, to privatise as much of it as possible, to encourage the growth of private hospitals and other fee-paying services and in this way compel people to take out private health insurance.

By forcing people to rely on private health insurance, they hope to undermine popular support for the public system.

Labor leader Bill Shorten has criticised the rips-offs associated with private health insurance. However, he has refused to turn words into action, ruling out Labor cutting the outrageous $6.4 billion government subsidy to the health funds.

We need to fight to defend Medicare, but we must go much further than that. It is outrageous that vital medical services, such as dentistry, optometry and physiotherapy, are not covered by Medicare and that most specialist services result in large out-of-pocket expenses.

This forces people who need specialist treatment or expensive dental work to take out private health insurance or be stuck on a waiting list for years at one of the tiny number of public dental hospitals.

Similarly, it is unconscionable that vitally needed drugs are not included in the Pharmaceutical Benefits Scheme, meaning that people are forced to use up all their savings to obtain life-saving drugs or are left to die or to endure agonising pain for years.

Abolishing the $6.4 billion subsidy to the private health funds would be a real step forward. That $6.4 billion spent each year on private health insurance should be used to upgrade the public health system.

But this needs to be part of a broader challenge to all the other rip-offs in the health and aged care system – the incredible overcharging by multinational drug companies, the huge profits made by the private hospitals, aged care businesses and the pathology testing companies.

They all must be brought into public ownership and subject to democratic control by health workers, not faceless bureaucrats.