Rent-seeking NIB Holdings MD, Mark Fitzgibbon, has called for private health insurance to be made compulsory and for Medicare to be abolished. He says the federal government would pay the cost of insurance premiums for those who are unable to afford them. Fitzgibbon has denied that his suggestion is evidence that the private health insurance sector is in a ‘death spiral’. From The AFR:
[Fitzgibbon] said his proposal would protect the most vulnerable, while allowing the private sector to flourish without competition from Medicare, which he called a “government monopoly”.
“[A] sensible policy approach would be to make private health insurance compulsory for all Australians with taxation devoted to subsidising the premiums for those who would otherwise be left behind. That is, high-income earners would at one end of the scale pay the entire premium while at the other, those with low income fully subsidised,”
So basically, Fitzgibbon wants Australia to shift away from universal health care to an Americanised private model. This would be a moronic move, given international evidence shows unambiguously that a privatised system is far more expensive and less efficient than universal public health care:
It’s not hard to see why. The high financial overhead of private insurance means that only 84 cents in every dollar collected by private insurers is returned as benefits, with the rest going to administrative costs and corporate profits. By contrast Medicare returns 94 cents in the dollar, even after the cost of tax collection is taken into account.
A single national insurer, like Medicare, also has the monopsony buying power to control prices demanded by powerful service providers.
If anything, the evidence suggests that the $6 billion private health insurance rebate should be abolished altogether and redirected into the public system.
