Senator Alan Eggleston



Senator EGGLESTON (Western Australia) (18:37): I have to say, by way of an opening, that plans to means-test the 30 per cent private health insurance rebate threaten to strangle Australia's health system, will directly affect an estimated 2.4 million health fund members and will mean a return to overcrowding and long waiting lists in public hospitals.

Unlike many other countries, we are fortunate in Australia to have a very effective health system which, by and large, is available to all, often at no cost through the Medicare system. The teenager injured on the football field, the young mother enduring a difficult birth, the middle-aged man with a heart attack and the elderly woman suffering a stroke know that help is never very far away, be it in the emergency room of a hospital, via the Medicare phone helpline or whatever. Those who suffer will rest a little easier knowing that their tax dollars are being well spent in catching them when they fall.

Sadly, however, the Gillard government continues to hack away at Australia's healthcare system, which once set the standard for other first world countries around the globe. In recent months we have seen the government muscle in on the recommendations of the independent Pharmaceutical Benefits Advisory Committee on the listing of PBS medicines. Similarly, funding for medical services like joint injections and cataract surgery were slashed last year while access was reduced for psychological services and GP involvement in psychiatric management, meaning less-effective service for those people who are in such need of it and who cannot wait the long time it sometimes takes to see a psychiatrist. Dr Gillard's latest health legislation, the fairer private health insurance incentives bills, continues the theme of downgrading our health services.

As I said at the beginning, plans to means-test the 30 per cent private health insurance rebate threaten to strangle Australia's health system, will directly affect an estimated 2.4 million health fund members and will mean a return to overcrowding and long waiting lists in public hospitals. It is ironic that this rebate was first introduced to deal with the very problem of overcrowding in public hospitals.

Means-testing private health insurance will make the scheme unavoidable for many people, and those who until now have saved the extra dollars each week to take up private health cover in the advent of the worst are about to have their good night's sleep taken away from them. They will feel the insecurity of not knowing whether or not they can get quick treatment for any medical problems from which they may suffer.

Having worked in the medical profession for over 30 years, I recognise the need for adequate private health insurance incentives schemes, especially for low-income earners. As I have said here before, people in most countries think their health scheme is the worst in the world because they have heard anecdotal stories about someone's grandmother not being treated immediately in a public hospital, or someone's child taking a long time to be seen in a casualty department, but the Australian health system is widely recognised as the best of the so-called worst schemes in the world. It is the envy of the world because our private health sector is a vital complement to the public health system. Our system is a balance between private and public medicine and, as such, it means that Australians are treated quickly and at a very high standard.

Private hospitals treat 40 per cent of all patients in Australia, with some 3.5 million people being treated privately in 2009-10. Private hospitals perform the majority of elective surgery in Australia—around 64 per cent of it—with 10.2 million Australians holding private health insurance cover. The simple fact is that the public system does not have the capacity to deal with the demand for its services. Unfortunately, this measure will exacerbate that situation, and will mean a return to long waiting lists and delays in treatment that will see people abandon their private health cover and seek treatment in the public sector.

As it stands, the government's proposal has twice been rejected by the parliament. It was introduced in the last parliament, despite explicit promises at the 2007 election by the then Minister for Health and Ageing, Nicola Roxon, who said:

Federal Labor has made it crystal clear that we are committed to retaining all of the existing private health insurance rebates.

The then Prime Minister, Kevin Rudd, also weighed in, saying in November 2007:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

Sadly, the number of Australians able to afford private health cover will decrease dramatically if this proposal comes into law, and the number of people in private health insurance schemes will fall almost as dramatically as the Prime Minister's polling numbers, and that is really saying something.

Our private health system relies on community rating to maintain its services, and people are not penalised as a result of their prior health history. Now there is to be means-testing of the scheme younger Australians may not need to access the health system, leaving those who really do need to access it able to claim from the pool of money which the broader membership contributes to the private health insurance schemes. However, with more and more people being pushed back into the public sector, Australia's public health system is set to become overcrowded. The private sector is set to become far more expensive, and the infrastructure which it represents will be underutilised, as it was in the past.

The Coalition, while in government, introduced private health insurance rebates because of falling membership of private health insurance funds and great overcrowding in the public hospital system. Once the rebate had been introduced, membership of the private health insurance funds went up by 10 per cent, from 34 per cent to 44 per cent of the population. This, I am afraid, will be reversed when this new system is introduced, if it is. Deloitte predicts that some 175,000 people in the first year alone will abandon private health cover. A further 583,000 people would be expected to downgrade their policy to a lower level of cover, putting their health and the health of their families at risk. The Deloitte study estimates that in just five years 1.6 million people will say no to private cover and 4.3 million will move to a lower level of cover.

Where will they go? Obviously they will go to the public hospital system. And the public hospital system is already overcrowded and bursting at the seams. It simply cannot support greater numbers. This is a disaster in the making. Labor is wrong to imply that private health insurance is for the rich. There are 5.6 million people with private health insurance who have annual incomes of less than $50,000 a year and 3.4 million who have an annual household income of less than $35,000.

In a blatant attempt to pass the buck, the Commonwealth will force the states to incur an extra $3.8 billion for health services as these increased numbers of people come to the public sector. That is typical of the approach of the Gillard government. The coalition, by contrast, believes all Australians should have access to affordable health care and real choice in managing their healthcare needs. For this reason we oppose this legislation. We think it is going to be a disaster for the Australian public as people will find themselves on surgery waiting lists which will have more names, perhaps, than the list of Labor's prime-ministerial aspirants! The Australian public will be facing long delays before treatment is available to them.

The Australian taxpayer cannot afford to have this strain placed on the public hospital system simply because the government cannot manage the country's wallet. This will be a complete disaster, and this legislation, if it is enacted, will represent a very black day for the Australian health system.

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