In its submission to the committee reviewing changes to the Private Health Insurance Rebate Bill, The Australia Institute describes the plan to remove higher rebates for over-65s as "modest and equitable". It says claims that the changes would force older Australians to relinquish their cover in droves are exaggerated.
Written by health economist Dr Luke Slawomirski, who will appear at a public hearing today, the submission says the changes would save billions of dollars over time, which would be better spent on aged care, primary care and preventative health measures.
Key points:
- When you take into account direct subsidies and indirect costs, private health insurance rebates cost the taxpayer more than $12 billion a year, yet there is little evidence to prove they achieve their primary goal of taking pressure off the public health system.
- Removing the extra age-based system is fair, because younger, healthier Australians already subsidise older, sicker Australians. Those who currently hold health insurance are more likely to be able to absorb a reduction in their rebate.
- Claims that removing extra rebates for older Australians would cause public hospitals to be overwhelmed are overstated.
- The money saved by providing fewer subsidies for private health insurance would be better invested directly in other areas of the health system.
"Why should people on the same income receive different taxpayer subsidies simply because one of them is older?" said Dr Luke Slawomirski, Senior Postdoctoral Fellow at The Australia Institute.
"Private health insurance is already designed so younger and healthier people subsidise older and sicker people. An additional taxpayer subsidy based solely on age is difficult to justify.
"The private health lobby is warning that this will lead to people flooding public hospitals. The evidence suggests that won't happen. Directly investing in things like aged care, primary care, dental and preventative health is a much better way to take pressure off public hospitals.
"The Commonwealth spends more than $12 billion every year subsidising private health insurance. For that kind of money, taxpayers should expect clear evidence that the policy improves health or meaningfully helps public hospitals.
"Public money should buy public value. Currently we have little evidence that the private health insurance rebate passes that test."
