Rising Premiums Sound Alarm
Sydney Morning Herald
Monday January 3, 2005
Another hefty hike in health insurance fees is likely again from April despite successive rises at two or even three times the inflation rate. The bargaining is under way, with private insurers likely to push for premium increases as high as 10 per cent. The Federal Government will respond before April 1. If a further7 per cent rise is approved, in line with recent increases, health insurance fees will have risen 40 per cent since 2001. This flies in the face of Government claims that pushing more people into private health insurance via the premium rebate would restrain premium increases.
The recent increases have been largely to fund higher payments to doctors and nurses. Those pressures are unlikely to ease any time soon, while insurers say that the steady increase in fees partly reflects the ongoing drift to private hospitals. Cost pressures on the health system remain acute, making more efficient management of health resources essential. The NSW Government has offered to transfer control of the state's health system to the Federal Government, in return for gaining full control of education.The Federal Government has sent mixed signals on the issue. Before the Premier, Bob Carr, made his offer, the Federal Government indicated support for such a move, although more recently the Prime Minister said he doubted the sincerity of Mr Carr's offer, suggesting that it may have had more to do with state politics. Yet it is in the best interests of all that the issue be tackled head-on. The federal-state divide is dysfunctional, yet it is proving difficult to gain traction on the issue.The Productivity Commission estimates that annual spending on health care will rise by about a third by 2044, with 40 per cent of the increase due to changing demographics - there will be more elderly people - and the balance to more expensive treatments. The steady rise in health insurance premiums is a very visible symptom that urgent treatment is needed.Resolving the issues is essential to ensure that the community gets the best return from its already heavy investment in doctors and hospitals.
© 2005 Sydney Morning Herald