Tag Archives: Age-Pension

Private Health Insurance in Australia – who needs it?

Disclaimer: I have just cancelled my private health insurance after almost 40 years. I will try to be unbiased as I present the facts that led to this momentous decision, but some bias is inevitable.

For Australians under 40, and international readers who know nothing about our hybrid health care system, I’ll start with a very brief overview:

The scheme [universal health care] was created in 1975 by the Whitlam Government under the brand Medibank, and was limited by the Fraser Government in 1976 to paying customers only. The Hawke Government reinstated universal health care in 1984 under the brand of Medicare. Medibank continued to exist as a government-owned private health insurance provider until it was privatised by the Abbott Government in 2014.

https://en.wikipedia.org/wiki/Medicare_(Australia)

Note: The government owned Medibank provided private health insurance in direct competition with private health insurers.

In 1999, the conservative LNP government led by John Howard brought in the Private Health Insurance Rebate Scheme. Depending on your age and income, the government will rebate 30% of the cost of your health insurance premiums. This rebate is subtracted from your health insurance premiums so you only pay for the remainder. This is the ‘carrot’ part of the equation. If you don’t take up health insurance by the time you hit the age of 30, you will pay 2% more whenever you finally do take up health insurance. This is the ‘stick’.

The purpose of the Private Health Insurance Rebate Scheme was ostensibly to relieve the pressure on public hospitals which are run by the states using funding from the Federal government.

When the rebate scheme was first introduced, premiums were relatively low and the private cover was a true ‘safety net’. In the 20 years since then, premiums have crept higher and higher while the payout for procedures and treatments has shrunk. This is true for both for-profit and not-for-profit health insurers.

As someone with a pre-existing medical condition, I’ve had basic hospital cover for almost 40 years. For most of those years, my premiums ensured that I could be treated in a private hospital by the specialist of my choice without long waiting periods or astronomical out-of-pocket expenses.

That all changed today when I finally realised that my basic hospital cover only did one thing – it allowed me to have my own specialist:

  • in a public hospital
  • in a shared ward
  • after I’d gone through the standard waiting period for public hospital treatment.

The following shows exactly what my private health insurance covers:

Apologies for the poor quality of the graphic but I wanted you to be able to see the whole thing. Every item with an ‘R’ next to it has ‘restricted’ cover only. This means that my private health insurance would only pay a miniscule amount [above and beyond what Medicare already pays]. Dialysis for chronic kidney failure, insulin pumps and weight loss surgery are not covered at all.

I don’t have kidney failure or diabetes or weight problems, but I can see at least five things I may need as I age. Sadly, with my basic private health insurance cover, I’d end up having to pay for them out of my own pocket anyway.

For me, the crunch came when I realised that I was already a [free] public hospital patient, but I was paying for the privilege.

Clearly, the hospital cover I had was next to useless, but when I looked at the levels of cover that would give me a proper safety net, I discovered that a) even some of the top plans didn’t cover me for everything and b) even if they did, I couldn’t afford them.

The sad truth is that I can barely manage to pay the $71.50 per month for the basic hospital cover I have/had. $71.50 doesn’t sound like much – it’s under $20 a week – but when you live on the age pension, $20 makes a difference. Wasting it on private health insurance that covers me for nothing is crazy.

So today I stopped being crazy and joined the ranks of Australians giving private health insurance a big miss. These Australians include young people on government support, older Australians on government support, and a growing segment of our population surviving in the GIG economy. In short, all those people who can’t afford the kind of health insurance that actually provides value for money.

So who’s left then?

I’m not sure. The table below is from the government website:

The income categories are shown across the top and indicate that under 65 years of age, all rebates cut out above $140,001 for singles and $280,001 for families. Taking bracket creep into account, that’s not a huge income by 2020 standards.

This may be my bias showing, but I am feeling rather ripped off. I’ve been a good girl and paid my premiums for years, but it seems as if the only ones benefiting from the 30% health insurance rebate are the health insurance companies themselves.

As the health insurance rebate is being paid from our taxes, I can’t help wondering whether we wouldn’t be better off if the rebate were abolished, freeing up all that money for the public health system.

Meeks


The Marie Antoinette disorder [in politics]

low carb hazelnut cakeMarie Antoinette pirouetted in front of the mirror, admiring her milk-white neck, or perhaps the priceless diamonds that nestled there. She really should have asked for matching earrings…

A timid knock on the door interrupted the Queen’s weighty deliberations.

“Entrez!” she trilled, not at all pleased.

The door opened to reveal a haggard man in full court regalia. When he bowed, the light streaming in through the windows of the Petit Trianon lit up the bald spots on his head.

“Majesty!” he said.

“Lord High Chamberlain,” she replied. “Why are We being disturbed?”

“Deepest apologies, Majesty,” the Chamberlain replied, absently brushing another hank of hair from his shoulder. “A delegation has arrived to petition the Crown. It seems the people have no bread…”

“No bread?” the Queen said, her perfect forehead creased in a tiny frown. “Why then, let them eat cake!”

Marie Antoinette, born on 2 November 1755,  beheaded by guillotine on 16 October 1793.

* * *

There is no historical evidence that Marie Antoinette ever said those infamous words, however the willful blindness behind them could well have been true. Sadly, modern day ‘rulers’ seem to be afflicted by the same disorder.

I am, just at this moment, thinking of our estwhile Treasurer,  Joe Hockey. Apparently Joe Hockey is trying to float the idea of pushing the retirement age out to 70…perhaps to claw back some of the money Prime Minister Abbott wants to give extremely well off women in the form of paid maternity leave.

It goes without saying that women capable of earning $150,000 per annum are in desperate straits, and need all the help they can get. The same cannot be said for Baby Boomers, such as myself, who selfishly refuse to pop off, and will soon become a huge burden on the welfare system.

Mr Hockey’s brilliant plan is to make Boomers keep working until they hit 70, at which point they may, or may not get a pension.

Now, I have to say that I never planned on retiring, at least as a writer, but given how hard it is to find a job at 61,  I do wonder what jobs Mr Hockey has in mind. Bricklaying? Plumbing? Garbology? Or perhaps some of the high flying CEO’s will burn out at 40 and make way for us mature types?

Or perhaps Mr Hockey doesn’t really care that there are no jobs out there for us. I’m sure his number crunchers have already worked out that having Boomers on the dole NewStart Allowance, is preferable to having them on the Age Pension.

Let’s do the sums. A single Pensioner at the maximum rate gets $842.80 per fortnight, or $421.40 per week. An unemployed person on NewStart gets $508.00 per fortnight, or $254.00 per week. I’m no maths genius, but even I know that’s a saving of $167.40 per person per week. That is $8,704.80 per year. Now if the retirement age is raised from 67 to 70 [for men] and from 65 to 68 for women, the government will save $26,114.40 per Boomer during those 3 extra years of -cough- work -cough-.

Another benefit of pushing the retirement age out to 70 is that many of the poorest Boomers may well die of starvation,  freeze to death in winter or die of heatstroke in summer as they try to juggle the conflicting needs of buying food, or paying the utilities out of $254.oo per week.

Of course, not all Baby Boomers will be affected by the new retirement age. Those on big incomes and hefty superannuation payouts will be fine. They will be able to access their superannuation at 60, and use all those lovely dollars to replace their ageing Mercedes with a new Beemer, and still have enough left to last them till they reach 70. With luck, and judicious spending, they should then be eligible for the full pension because all of their superannuation will be gone.

So let’s take those Boomers out of the equation. Who have we got left? Hmm,  apparently there will still be quite a few Boomers with a disability [and no superannuation], unskilled manual workers [men and women] with very little superannuation, single parents [mostly women] with little to no superannuation, and divorced women with grown children who never managed to accrue any superannuation at all…

* * *

Tony Abbott is staring into the mirror, admiring his spandex when his deliberations are interrupted by a knock on the door.

“Enter!” he growls, not at all pleased.

The door opens to reveal a haggard man suffering from severe alopecia.

“What is it Joe?”

“Um, I got the budget into surplus, Tony, but there’s a delegation of Boomers outside, and they’re not happy. They say they can’t get a job…”

“No jobs?” the Prime Minister said, his forehead creased in a tiny frown. “Why then, let them have NewStart!”

* * *

I rest my case.

Meeks

p.s. I hope you all had a wonderful Easter!

 


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