Public System Pressure Stays Despite Tax Dodge
Sydney Morning Herald
Sunday June 29, 1997
People without private health insurance will be stuck in the "slow lane" for treatment in the public hospital system.
That's the message of the Federal Government's multi-million dollar advertising campaign to convince people to take out cover from tomorrow.
Tuesday is the first day of the Government's $1.5 billion health insurance incentive scheme and its policy of charging higher income earners a 1 per cent Medicare surcharge if they are not insured privately.
Higher income earners who are not insured are being offered cheap health insurance deals which allow policyholders to beat the tax surcharge.
The surcharge affects singles earning more than $50,000 a year and families earning more than $100,000. However, they can avoid the surcharge by taking one of the new policies, where patients pay less for cover depending on how large an excess fee they agree to pay.
A family earning $100,000 can take out a policy with MBF for $670, under which they must pay the first $1,000 of a hospital fee. This saves them from paying $1,000 to the Tax Office, so those who are liable to the surcharge save $330 simply by taking out the policy.
The catch for the Government is that no-one with private health insurance is obliged to use their cover and can continue to use the public system and avoid paying the excess.
This would undermine the Government's strategy to stop leakage from private health schemes - only 32 per cent of the population is covered, compared with 50 per cent in 1985 - as well as to coerce highincome earners to go private and take pressure off Medicare.
The managing director of MBF, Mr David Ashenden, last week took the unusual step of writing to all Federal MPs to distance the fund from advice that high-income earners could avoid the surcharge and still use the public hospital system.
He acknowledged that the dodge was possible but called on the Government to means-test access to the public system to reduce Medicare's burden.
The Government's TV advertisements will show families travelling down a freeway in hospital trolleys instead of cars. A traffic jam develops and some families veer off to an express lane marked "private insurance".
The Health Minister, Dr Wooldridge, said last week that even in the case of dangerously ill people, there was "very strong anecdotal evidence when you talk to doctors that people do actually get treatment faster if they have private health cover".
© 1997 Sydney Morning Herald
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