The heavy subsidies dished out to private health insurance has increased the equity gap between those who can afford it, and those who can’t. The Howard Government’s goal of an increase in numbers in private health to ease the pressure on public hospitals has proved otherwise, with not only business going to private hospitals, but with them the professionals too. One of the starkest inequities is found in dental care. Apart from the most exceptional cases, dental care is not covered by Medicare, but is included in many health fund policies. The result is taxpayers who cannot afford private insurance or a trip to the dentist are helping pay the dental bills of those much better off.

Mike Steketee in The Australian writes:

“When the Howard government introduced the 30 per cent rebate for private health insurance in 1998, Labor’s health spokeswoman Jenny Macklin called it ‘the worst example of public policy ever seen in this parliament’.

While making allowance for hyperbole, she was right, not that she, or anyone else on the Labor side in Canberra, would dare say it now. The problem was that it was popular. We all like money for nothing, or the illusion of it.

The truth is the rebate costs us a packet as taxpayers and is one of the most unfair government subsidies ever devised. Its cost has risen from an annual $1.5 billion to an estimated $4.7bn this financial year.”

Read the full article in The Australian here

Read CPD’s John Menadue and Ian McAuley’s discussion paper Private Health Insurance: High in cost and low in equity

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