Healthcare in Australia is a horror story

Australians are paying three times for their health care through the Medicare levy, private insurance and the widening gap. Is it time to dump the two-tier system?

Our political leaders have been talking up healthcare during this election campaign, but is it time to completely overhaul the two-tiered system? (Pic: Lyndon Mechielsen)

In my last article on our buggered up health system, I said Australians were lumbered with an “expensive, inefficient, bastard, hybrid” scheme that’s “anything but a fair deal”. A lot of people evidently agreed.

People like Bill who has “top cover with Gold Extras” with insurer CUA. His premium skyrocketed by 10.9 per cent this year and it’s now costing him and his wife $4923.12 per annum, with a $250 excess. (So much for 5.6 per cent increases, eh Health Minister Sussan Ley?) Bill was burned up enough to work out by how much his premiums have increased in the past eight years — 94 per cent!

People like pensioner Jane, 71, who has recently taken out hospital only private insurance. Thanks to a hefty “lifetime health cover” penalty tacked onto her premium, she’s handing over $200 a month from her pension. She took out the policy as she was told the wait period in the public system for a difficult elbow operation is five years-plus. She’s desperately fearful of “going without” (meals presumably) to pay for private insurance while waiting for the insurer’s 12-month wait period to elapse, only to be faced with out-of-pocket expenses she can’t pay.

People like Ken and Dawn. Earlier this year Dawn was admitted to the Nambour Hospital ED with heart attack symptoms. After a check-up she requested a transfer to a private hospital. She was admitted at 10.30pm. Cleared to leave the next day, Ken picked her up at 12.30pm. Bupa later advised the couple it had paid $3954 for Dawn’s 24-hour stay.

“Not bad for a room, two cups of tea, a sandwich and a couple of biscuits. Any wonder private health cover costs $$$,” Ken fumed.

People like Jeff who said in 2004 he had a knee replacement that was covered in full by his private insurer, apart from one $150 out-of-pocket expense for the (presumably very greedy) anaesthetist. Fast forward 12 years and this year Jeff had a shoulder reconstruction. His private hospital costs were covered but he was left with a $3066.35 gap thanks to his surgeon’s and anaesthetist’s charges.

Australians have been lumbered with an expensive, inefficient, bastard, hybrid scheme that’s anything but a fair deal. (File Pic)

People like Karen’s husband who last year was left $15,000 out-of-pocket following prostate surgery. Never mind he’d had top private health insurance all his working life.

Couples like one of my colleagues who has calculated he and his working wife are paying around $9000 a year for their private health insurance premiums and Medicare levies.

Australians are paying three times for their health care through the Medicare levy (1.5 per cent of taxable income), private health insurance (with premiums rising by more than triple CPI annually) and through the widening gap between the Medicare Benefits Schedule fees for procedures and what doctors actually charge.

This mess is a nasty side effect of having parallel systems — one “public” fully taxpayer-funded and not profit driven; and the other “private” and profit driven but still partially taxpayer-funded (through the punitive lifetime health cover penalty reaping private insurers around $600 million a year, plus the $6 billion a year rebate). Surely this public underwriting of the so-called private sector encourages inefficiency and even profiteering?

Linked to this are insurers selling “basic hospital” policies costing a motza but covering next to nothing — you may as well set fire to 15 $100 bills. Punters only take out these rubbish policies because of the dual threat of the lifetime health cover penalties and Medicare levy surcharges of between 1 and 1.5 per cent. Then, when a health issue looms and you’re told you need an upgraded policy, the basic one you’ve had for years counts for nothing as the insurer slaps a 12 month waiting period on you.

This mess is a nasty side effect of having parallel systems — one “public” fully taxpayer-funded and not profit driven; and the other “private” and profit driven but still partially taxpayer-funded. (File Pic)

Meanwhile, the Medicare levy of 1.5 per cent hasn’t been lifted for 21 years. No government has had the balls to increase it as a means of helping to pay for the rising health bill. But it should be regularly reviewed and periodically increased so that MBS fees can be regularly reviewed and fairly increased (not bloody frozen) so they better reflect the true value of procedures. This should work to reduce the size of the gaps charged by most doctors.

That said, there’s no excuse for the very big gaps charged by some specialists. Royal College of Surgeons president David Watters has stated the college’s position is “there is absolutely no relationship between the size of the fee charged and quality of surgery provided”. He’s right.

So before your GP refers you to a specialist, get the name of three or four and phone them first to ask what gaps you might be required to pay. Some don’t charge big gaps. Some have arrangements with some insurers to eliminate or cap gaps. Some don’t and have huge gaps. Voice your displeasure to the latter before avoiding them.

The Coalition has released its “plan” to improve private health insurance value for money. But is it time to stop tinkering and look at dumping or radically revamping the two-tier system?

You tell me — and, again, if you’ve got a gap, lifetime health penalty or waiting list horror story to share, post a comment and email me.

Margaret Wenham is the Opinion Editor for The Courier-Mail.

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