Let’s talk about Australia’s healthcare system, shall we? A bizarre carnival where we’ve somehow convinced ourselves that paying for two parallel systems – one public, one private – is “efficient.” Spoiler alert: it’s not. It’s like buying a Ferrari and a Vespa to commute, then complaining about traffic. But fear not! There’s a simple fix: Abolish private health insurance, scrap its taxpayer-funded rebates, and fund Medicare properly. Radical? Only if you think healthcare should be a human right, not a luxury for those who can afford to dodge taxes.
1. The Current System: A Hot Mess of Subsidies and Side Hustles
Imagine a system where the government spends $6.7 billion a year bribing Australians to buy private health insurance (PHI) through rebates, while simultaneously letting high earners skip the Medicare Levy Surcharge (MLS) – a literal tax on being uninsured. The result? A bloated, two-tiered mess where:
- Public hospitals drown in waitlists (hi, 300,000+ people waiting for elective surgery!).
- Private insurers profit by cherry-picking healthy patients and upselling “extras” like yoga classes (because nothing says “healthcare” like a 10% discount on acupuncture).
- You pay for it all, twice: through taxes and premiums.
But sure, let’s keep pretending this isn’t a glorified Ponzi scheme.
2. The Case for Killing Private Health Insurance (And Why It Won’t Hurt)
Private health insurance isn’t just redundant – it’s parasitic. Here’s the truth:
PHI doesn’t “relieve pressure” on public hospitals. Only 8% of hospital beds are private, and most PHI-funded care is for low-risk procedures (like cataracts) that public hospitals could handle if funded properly.
- Tax rebates for PHI are a scam. We’re subsidising shareholders, not patients. Meanwhile, the wealthy skip the MLS (1.5% of income!) by buying bare-bones PHI policies – effectively gaming the system.
- Other countries do it better. The UK’s NHS and Canada’s single-payer systems spend less per capita and have better outcomes. But no, Australia loves its healthcare Hunger Games.
3. The Medicare Levy: Let’s Stop Pretending 2% is Enough
Australia’s Medicare levy is a paltry 2% of taxable income – less than a Netflix subscription for most. Compare that to countries such as Germany (7.3%) or France (8%). Even the U.S. spends 16% of GDP on healthcare (mostly privatised chaos).
Solution? Raise the Medicare levy to 4–5%, eliminate PHI rebates, and funnel all funds into:
- Cutting waitlists: Hire more staff, expand public hospitals, and buy out private facilities to boost capacity.
- Free dental/mental health: Because teeth and brains are part of the body, last we checked.
- Negotiating bulk drug prices: So you’re not paying $50 for Panadol at a private ER.
“But won’t taxes go up?!” Yes – by about $2,000/year for the average high earner. That’s less than annual PHI premiums (up to $4,200), and unlike insurance, you’ll actually get healthcare.
4. What Happens to Private Hospitals? (Spoiler: They’ll Be Fine)
Private hospitals aren’t going anywhere. Under a strengthened Medicare:
- They’d join the public system, performing surgeries at Medicare-negotiated rates (bye-bye, $30,000 hip replacements).
- Capacity would surge. Private hospitals already do 60% of elective surgeries – imagine that throughput without insurance middlemen.
- No more “VIP wards”. Healthcare is a service, not a spa day.
5. The Snarky Bottom Line
Australia’s healthcare system is a farce where we pour billions into propping up a failing private industry while pretending it’s “choice.” Newsflash: You don’t need “choice” when the default option works.
By abolishing PHI, scrapping rebates, and raising the Medicare levy, we could:
- Slash waitlists by years.
- Save billions in bureaucratic waste.
- Finally stop pretending that a two-tiered system isn’t just classism with a stethoscope.
So let’s stop clinging to our healthcare participation trophies (looking at you, PHI) and fund Medicare like adults. Your gallbladder will thank you.
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Canada has universal health care, it has also trialled Universal Basic Income (UBI) and discovered, contrary to the neo-fascist conservatives, that UBI reduced the cost of health services by more than the cost of the UBI programme..
Time to stop funding private health care insurance and put those government funds into the public hospital system. Then NSW could afford to pay nurses and hospital doctors what they deserve.
We all must demand free universal health care that will benefit everybody (except the health insurance executives who will need to get a p[roper job).
Meanwhile private health insurance boss wants an Americanised health insurance system.
‘Shoot Bambi’: NIB boss pushes to abolish Medicare
Patrick Hatch
July 23, 2019
He said within five to 10 years he would like people with private health insurance to be able to drop out of Medicare, and for private insurance to become mandatory within 20 years…..
All public hospitals should be privatised, he said, because that would mean all patients would have the same waiting periods for treatment, as opposed to the current two-tiered system.
https://www.smh.com.au/business/companies/shoot-bambi-nib-boss-pushes-to-abolish-medicare-20190723-p529w3.html
As a pathology collector, I agree 100%. There are a number of blood tests that have been taken off Medicare, so people have to pay. It’s a horrible system. I wish everything was on Medicare.
The rules of the PSA test (as an example) are very confusing, but at least they aren’t as invasive as when LNP were in power (asking men how they peed was very embarrassing for the men as well as for myself). I use this as an example to men about how Medicare works and that my greatest wish is for it all to be back on Medicare, and why voting for LNP is not a good idea. All blood tests should be on Medicare. There shouldn’t be this cherry picking when people’s lives can be at stake. The fact that men have to pay to see if they have prostate cancer is an abomination.
As Dutton wants to get rid of Medicare, we need to vote for our own good. That means voting for our own humanity.
My only question in relation to scrapping private health funds is – what happens to overseas visitors? Will the health funds still exist for them? At this point, private health funds pay for blood tests…
It sounds good, but any party that proposes it will be doomed, all the masses will see will be Raised Taxes.
How about making the Medicare levy surcharge 5% to start with, rich people don’t get to claim a rebate. If you’re income is above the level you pay extra, simple. And if you ARE wealthy you don’t get to choose a public hospital, you must go to a private one.
If it works in France, let’s do it their way
Private health is quite chancy. Not enough people understand that their private health cover can run out in the middle of their sickness. The next thing they know is they are being admitted to a public hospital through Emergency, and it is no advantage to them to say -“but I’m a Private Patient” The response will be, “Not here, you aren’t!”
Another example of the stupidity of private medicine is that our local private hospital does a more comfortable private room for women once they give birth, but everyone has to give birth in the same public hospital’s Labour Ward.
Agree on the levy being ridiculously low, but the article does not analyse demographics of ageing and more seniors needing more access to/delivery of medical services; nor comparisons with other systems?
Demographics and increasing physical numbers are exemplified by old age dependency ratio trends; our permanent cohort is ageing, accessing health services and Medicare more.
Retirees 65+ years/working age 20-64; in 2000 20%, now 30% and mid century 40%+ (then may flatten & decline post boomer ‘bomb’); reflects more oldies vs fewer working age tax payers.
International students esp. use compulsory OSHC private insurance to partly subsidise &/or take state funding pressure off Medicare, while privately insured can save on ‘bed days’ to ensure state system can cope with increasingly more senior clients.
Surgery can be done in state system, then after intensive care transfer, to private hospital (often annexe next door), leaving state beds available versus potential patient overflows; see nations coping with surges of senior in patients during epidemics inc influenza.
Despite headlines of ‘high immigration’ &/or ‘population growth’, this masks that mislabelling temporary students as immigrants inflates numbers, but marginal ‘data noise’ on top of the more significant and larger permanent cohort.
The Senior did a very good article looking at trends of population and ageing; 15-35 stays same (inc student churn) proportion vs increasing retirees in permanent cohort, as boomer ‘bomb’ transitions, due to longevity, needing more care.
https://www.thesenior.com.au/story/8271715/an-ageing-australia-can-we-handle-it/
Dentistry care should be a priority.
I spent $604.00 at my dentist in two days this past week – this is not mentioning the $117 and $71 princely sums my Peoplecare health insurance contributed. Dental clean – day one and small filling day two. Labor never addresses the need for dental health care as part of Medicare. No wonder people can’t afford to go to the dentist in Australia. Dental health is imperative towards good overall health. It must be part of Medicare.
In the last couple of years at least ten private maternity care hospitals have withdrawn their services, largely due to not being able to make enough money to make it viable (profitable).
Private hospitals and healthcare providers will only go into regional areas where there is a big enough population of people who can afford private healthcare insurance – in my regional area we are fortunate to have two public hospitals within cooee but only one private provider about 90 minutes away by ambulance but that suits us fine – if we have an emergency, a stroke or heart attack or a car accident we would be taken to the public hospital anyhow – they wouldn’t be able to find out if we had private cover when we were unconscious – unless we had a chip implanted which is probably what they would like to see.
It is ludicrous that taxpayers are subsidising private health insurance services for a small and diminishing group of people (mainly in urban areas) who avail themselves of private insurance. As has been noted, we could redirect that subsidy into Medicare provided dental care.
the private hospital in darwin and the ones I was in down south have always been suitable for ingrown toenails and childbirth. The nurses were detached with neither any displays of loyalty nor of interest in their job. In my frequent bouts with RDH, as soon as possible, they would ask if I would like a transfer to the private and I would say no. thank you. If a doctor was persistent I would ask them to check my file feb 2001 that was the end of it.
There is no room for privatisation in health, water, power and the public service.
The higher income surcharge levy, and the way it is used to force people into private health needs to be abolished.
If people want to have private health, on top of medicare, then let the market decide. There should not be any forced propping up of private health. Many of those forced onto private health get the minimum for which they get little if any benefit from.
There should be no surcharge because high income earners would be paying the same percentage levy as low income, which would mean that a person on 200,000 would pay more than a person on 50,000.
The surcharge was designed to prop up the private health insurance companies – let them sink or swim.