Australia’s health care system is once more under media scrutiny, as several recent developments are likely to cause a stir, both at state-level, as well as country-wide. On the one hand, the 2012-2013 financial year has just ended, which means Australian tax payers are preparing to file their tax forms. Even though the means testing of the rebate on private health insurance came into force around this time last year, this summer is the first time when it’s actually going to happen. Industry experts predict that most of those who will be seeing their rebate reduced or eliminated aren’t expecting this to happen and don’t fully comprehend its effects. At the same time, at state level, hospital funding in New South Wales is expected to affect both the quality of the public health care system, as well as the health care costs incurred by privately insured patients.
The means testing of the rebate has returned to the attention of the media and the public, as Australians prepare to send in their tax statements. According to the currently enforced law, households who make more than $166,000 each year will see their rebates reduced, while those who earn in excess of $285,000 will lose the rebate in full. The same applies for single income earners who make over $83,000 a year and over $129,000 respectively. Most of the tax payers who are about to be affected by the means testing are probably not even aware of this, according to the spokesperson of one of Australia’s largest health funds. What is more, they fail to understand the impact and consequences of a 30 per cent private health insurance cost increase – and will likely only grasp its full scope once they are asked to pay the amount of money in full and at once, with the tax return form.
Even though the means testing reform of the private insurance rebate has determined many to compare private health insurance, in search of more affordable coverage premiums, the market has continued to grow throughout the past year. Government officials explain that most people decide whether or not to remain or become private health fund members according to the income they make and how much of it they can afford to spend. Some industry analysts predict that the industry will continue to expand, owing to the poor reputation of the public system, as well as the currently enforced penalties that apply to those who fail to take out private health insurance.
Meanwhile, as means testing unfurls at national level, the state of New South Wales is about to see its public hospitals take a heavy toll, following public health funding that falls beneath inflation levels this year. While the money from the state budget will be less than usual, the number of patients to be treated in public hospitals in New South Wales is estimated to grow by some 100,000. And, ironically, its privately insured patients who are probably going to have to cover the expected costs caused by poorer funding. The state government has announced that public hospital funding is lower by $80 million, compared to the level it should stand at. According to New South Wales officials, the status quo has been brought on by a cut in private health insurer-sourced funding, for covering health care costs incurred by their members in public facilities.
Those costs, however, need to be covered, as public hospitals are already underfunded. As such, the state government is allegedly planning to increase the health insurance levy by some $33 per year on average. Alternatively, private health insurers can choose to return to the proper level of funding for private patients in public hospitals. The New South Wales health budget for the current financial year is 5.2 per cent larger than the one last year, but current inflation levels within the health system stand at 7 per cent, according to the Australian Medical Association.
