Private health insurance is unfair and inefficient. It was because of this that the Whitlam Government established Medibank/Medicare.
“Voluntary health insurance was condemned by Nimmo for having become complex to the point of incomprehensibility, charging contributions beyond the means of many members of the community, paying less in benefits than the cost of medical and hospital services, causing serious and widespread hardship through the application of ‘special account’ regulations, appropriating too much of its own contribution income for operating expenses and accumulating excessive reserves.”
Gough Whitlam said this in 1969. What he said then about voluntary/private health insurance is still true today. It is inefficient and unfair. It is eroding Medicare.
Yet inefficient and unfair private health insurance is prospering in Australia as a result of an enormous government subsidy. Private health insurance is undermining Medicare and is subsidized by Australian taxpayers, costing $11 billion p.a.
That subsidy should be abolished and some of the money saved should be spent to include dental care as part of Medicare.
Unfortunately the ALP does not understand the threat of private health insurance to Medicare. That is the real ‘mediscare’ – the undermining of Medicare through highly subsidized private health insurance.
These private health insurance companies are parasitical as Gough Whitlam described in 1969.
The creation of Medibank/Medicare by the Whitlam Government was driven by concern about the unfairness and inefficiency of private health insurance. It was a major issue in the lead-up to the 1972 election.
As background, the ALP in the Senate in 1968 was responsible for establishing a Select Committee on Medical and Hospital Costs. To head off this report, the McMahon Government appointed Justice Nimmo to conduct an enquiry into Health Insurance. Not surprisingly, both the Nimmo report and the Senate report condemned the inefficiency and waste of private health insurance.
Those two reports laid the basis and the reasons for establishing Medibank/Medicare. The ALP today does not understand that.
PHI is a grave threat to Medicare but the ALP does not seem to care
Every country that goes down the private health insurance path encounters enormous difficulties. The US is a clear warning of what not to do in health funding