Private health insurance (PHI) premiums are set for another 8% hike

 

 

Reports that private health insurance (PHI) premiums are set for another 8% hike should come as no surprise. This will mean an extra $150 million in taxes every year going to this grossly inefficient private industry through the PHI rebate. The promise from the Howard Government four years ago when the rebate was introduced was that it would lead to downward pressure on premiums. Instead, premiums have risen by 7% yearly and are set to rise again. It must have been a non core promise.

Every year $2.2 billion in taxes (the total PHI rebate) is spent supporting the minority of Australians who can afford PHI, enabling them to queue jump the public hospital waiting lists by going to private hospitals. But it is public hospitals which are desperate for funding and for doctors.  It is time to re-examine the value and the morality of this inequitable inefficient private industry subsidy which benefits less than 44% of Australians and disadvantages the rest.

 

Dr Tim Woodruff

President

Doctors Reform Society

Published in The Australian

14 January 2004