John Thompson. Fiona Nash and private health insurance for rural Australians

Feb 16, 2016

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A few nights ago on Q&A, the Minister for Rural Health, Fiona Nash, undertook to drop out of private health insurance while she was in office. Ms Nash lives in Crowther, a small town about midway between Wagga Wagga and Bathurst. Foregoing private health insurance makes a lot of sense for her because, like most rural and regional people, she pays a large amount to private insurers and has very limited access to private hospitals and related private services in her area.

The map above shows why rural people are especially short changed with the private health system. The brown markers indicate public hospitals and the private hospitals are shown by purple markers. Crowther is almost in the middle of the map – 180 kms from Wagga Wagga and 141 kms from Bathurst.  There is one private hospital in Wagga Wagga and one in Bathurst, and neither has an emergency department. [On my count, there are about 30 public hospitals in this area. JM]

The private health system is one of the most expensive Commonwealth Government programs.  In 2016/16 direct outlays by the Commonwealth Government will be $6.3 billion and income tax foregone will amount to $4.2 billion, a total of $10.5 billion for the year.

Ms Nash, as a Nationals Party representative, should recognise that the private health system is particularly costly for her rural constituents because they are getting such a very raw deal. They are paying large sums directly to the private insurers and similarly large sums in taxation to support those insurers.  And they are getting very little in return.

Rural Australians should ask themselves what they are getting for the large sums they are paying, both directly and through their taxes, to private insurance companies, and perhaps follow the lead of their elected representative, the Minister for Rural Health.

John Thompson is an economist with an interest in health policy.

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