Massive health fund profits are making people angry

Contributed by Joe Montero

The massive profit hike enjoyed by the private health funds just made public is obscene. All the more so, when it has been artificially created by the government, through raising what people must pay, to well above the inflation rate. This has nothing to do with market conditions. It is an administrative profit deliberately handed over to the health funds.

Groups representing doctors, surgeons and device makers have raised serious concerns.

Australian Medical Association president Michael Gannon said the figures made it “time for some serious questions” about the system.

“Australians are openly questioning the value of private health insurance, complaining about the out-of-pocket costs, increasing number of conditions, caveats, carve-outs and proliferation of junk policies,” he said.

“You can understand why people are getting angry at the profits ending up in the pockets of overseas shareholders.”

Michael Steiner, president of the Australian Society of Ophthalmologists, which represents eye surgeons, said: “It’s absolutely obscene when you see the profits they’re making and the effect they’re having on health”.

Last year, the peak body for the private health funds, Private Healthcare Australia, pushed for 4.8 percent increase to premiums. The government obliged and gave them 6 percent

In the year to 1 April post tax profits rose by $1.3 billion or 18 percent. The quarters before, profit had gone up by 11.5 percent and 28.5 percent. They have been lifted 28 percent since 2012, even though the Australian Securities and Investment Commission and the Australian Competition and Consumer Commission, had determined that profit levels of health funds were “appropriate”.

This assistance to the private health funds has gone on, in tandem with an increasing sense of insecurity, as the same government downgrades Medicare. A year ago, was the time when the intention to make changes to the rebate, copayments and other measures were announced. Insecurity has been manipulated to push people into the private health funds and accept paying the cost of rising premiums. Australians have handed over $22.8 billion for the privilege.

There is also  ongoing defunding of hospitals and other medical services in real terms, together with a transfer of resources to the private sector. The Australian health system is being systematically privatised.

But it is the government’s assistance to the private health funds that most clearly shows that their high profits cannot be gained on what they have to offer, because they offer very little.

To treat the health concerns of Australians in this way is shameful. The opportunity to enjoy good health should always considered a right.  It should not be turned into an opportunity for profiteers.

We are  drifting  towards having an American style health system, where when you get sick, the first thing examined is your wallet.

Australia is headed towards a tiered and class based health system. One for the well to do and a third-rate system for everyone else. We are not there yet, thanks to a high standard system built over many years. But this will be the future if we continue down the present road.

The private health funds contribute nothing. All they do is skim up some of the health money that could be better used for other purposes and they certainly should not get government assistance to build up their bottom line.

Australians are already paying for what should be called a national health fund through the Medicare levy and already have coverage. Instead of siphoning off to the private funds and cutting down Medicare, resources should be turned to building up the national fund. Through it, medical services can be provided at lower cost, through advantages of economies of scale that the private funds cannot match.




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