Growing concern among older Australians about the future affordability and value of private health insurance should prompt the Federal Government to reconsider proposed changes to private health insurance rebates, COTA Australia says.
Research conducted by COTA Australia found many older Australians are questioning whether they will be able to afford to keep their private health insurance if the Government proceeds with plans to abolish the higher private health insurance rebate for people over 65.
The survey found 82 per cent of COTA Australia supporters surveyed opposed the proposed changes, 89 per cent were concerned about their impact and more than a third are planning to downgrade or cancel their private health insurance if the changes proceed.
COTA Australia Chief Executive Officer Patricia Sparrow said the research showed the proposed rebate changes were becoming part of a much wider conversation about the affordability and future role of private health insurance.
“Our research highlights broader concerns that if significant numbers of older Australians leave private health insurance, it won’t just affect individuals. It has the potential to place additional pressure on Australia’s public hospital system,” Ms Sparrow said.
“Older Australians have spent decades paying into the private health insurance system, often making relatively few claims, and now risk being priced out just when they need it.
“Any review of private health insurance rebates should recognise that long-term contribution, while also considering the consequences if affordability pressures begin driving people out of the system.
“We’ve got to remember that one in four older Australians are living in poverty. Changes that make private health insurance more expensive for those already doing it tough will inevitably result in people cancelling their plans.”
Ms Sparrow said while it is positive that the Federal Government is now looking at private health care reforms, older Australians are telling COTA Australia they are increasingly questioning whether private health insurance will remain affordable and represent value for money.
“The proposed rebate changes are adding to concerns that many people are already feeling as premiums continue to rise, out-of-pocket costs increase and household budgets remain under pressure,” Ms Sparrow said.
“Many older Australians have paid private health insurance premiums for decades, including during the years when they were younger, healthier and making relatively few claims. They supported the system because they expected it would be there when they needed it most.
“Now, just as they’re more likely to rely on that cover, they’re facing rising premiums, increasing out-of-pocket costs and proposed rebate changes that would make private health insurance even less affordable.
“The Government should use the debate around the rebate to undertake a broader review of private health insurance and its role in Australia’s healthcare system.
“This is an opportunity to take a broader look at whether private health insurance is delivering value for Australians, how it complements the public health system and how we ensure it remains accessible for the people who rely on it most.
“The Government should carefully consider the impact these proposed changes could have, not just on older Australians, but on Australia’s health system as a whole.”
Case studies available on request.
Media contact: Tamara Kotoyan, 0430 291 890 or Alana Mew, 0419 929 722
Direct quotes from COTA Australia research
“I have had private health cover since I was 18 – mostly top-level – and I have rarely used anything other than extras. I have paid year after year on the basis that this is part of preventative health care: get problems dealt with early, stay well, stay independent, and avoid avoidable demand on the public system. If these changes go ahead, I will have to seriously consider dropping some cover I have maintained for decades – which is exactly how you end up exacerbating health issues and increasing reliance on public services.” Age: 70+, Cover: Gold
“This policy change will force us to cope with two compounding pressures: a reduced rebate and high annual premium increases by all health funds. We cannot drop to a lower cover because things we need to use will not be covered, such as joint replacement or heart procedures. All this done in the name of intergenerational fairness.” Age: 65-69, Cover: Gold
“It is policy-by-spreadsheet: make private cover less affordable for the very cohort most likely to need it, then act surprised when people downgrade or drop their policies and the pressure pops up somewhere else – usually in the public system, at a higher cost and later in the illness cycle.” Age: 70+, Cover: Gold
“I accept the need for change and would have no issue with the proposed changes if I was not retired. We budgeted the current private health rebates into our retirement budget upon retirement 10 years ago. Having them stripped away now seems very unjust.” Age: 70+, Cover: Gold
“The private health insurance system is at a point where its value is questionable. Present at a hospital as a person with no insurance, you go on a waiting list and eventually get your procedure for free. Present as an insured patient, you get your procedure and a whopping bill. The health business is broken.” Age: 70+, Cover: Gold
“I was diagnosed with a chronic lung condition 10 years ago. If I had not had private health I would not have been able to access specialists and the ongoing medical treatment required to keep me out of hospital. If the changes go through, I will not be able to pay the costs and will be reliant on the public health system for specialists, rehabilitation and physio. Without this my health will decline and I will become an increasing carer burden.” Age: 70+, Cover: Gold
“Something like a knee replacement is called elective. Well, I can hardly walk now, and if I depended on the public system I will be in a wheelchair way before I get my knee replacement.” Age: 70+, Cover: Gold