HIGH FEES, HUGE GAP PAYMENTS – WHY 70 PER CENT OF PEOPLE FEEL PRIVATE HEALTH INSURANCE ISN’T GOOD VALUE

Ms BIRD (Cunningham) (18:15): I indicate to the House that I rise to support the amendment moved by the shadow minister. The bill before us, of course, is the Health Insurance (Approved Pathology Specimen Collection Centres) Tax Amendment Bill 2018. It's intended to change the frequency of the tax paid by approved pathology collection centres, known as ACCs. At present, each of Australia's 5,500 to 6,000 ACCs pay a tax of $1,000 when approved. That has to be renewed each year. Under this bill, they'll pay a tax of $2,000 every two years instead. The intention of the bill is to reduce the regulatory burden for government and industry and to maintain the revenue raised from the tax.

                                                                                                                      

Of course, as the shadow minister outlined, the bill sits within a range of developments that have occurred since the 2015-16 MYEFO. At that time, the government sought to cut $650 million from Medicare bulk-billing incentives for pathology and diagnostic imaging, including abolishing incentives for pathology. The peak body, Pathology Australia, commenced a serious and major campaign against those cuts. It was called the Don't Kill Bulk Bill campaign. That particular campaign included a petition which attracted over 600,000 signatures. As a result of this campaign, during the 2016 election campaign the government reached a settlement with Pathology Australia. Pathologists accepted the abolition of bulk-billing incentives in exchange for re-regulation of the rents that pathologists pay to GPs to co-locate in their practices. However, GP opposition to the changes forced the government to break that deal in the 2017 budget. This bill is one of a number of policy changes that the government has offered to the pathology sector in return. The amendment moved by the shadow minister reflects the problems that have led to this position, whilst not denying the bill a second reading.

In speaking to this bill and the health insurance industry, I just want to touch on some of the concerns that have been raised by my local constituents. In February this year, I did one of my costs-of-living surveys and had over 1,000 locals respond to that survey. Over 80 per cent of them indicated that they'd had no real increase in their pay or, indeed, had had a reduction in their pay over the last three years; 45 per cent of them said that their doctor and specialist visits put increased pressure on their budgets; 33 per cent said pharmaceuticals put an increased pressure on their family budget; and 67 per cent said that private health insurance costs put increased pressure on the family budget. Of those who responded, over 70 per cent of people said they found it difficult to make their income stretch over their pay week, fortnight or month. Over 70 per cent are struggling with the cost of living, and a significant proportion of those indicated that health costs were an important contributor to that struggle. Over 70 per cent of those who responded felt that private health insurance was not good value. I'll just repeat that: over 70 per cent—over a thousand people, just in my electorate—indicated that they did not feel they were getting good value for money with their private health insurance.

Not only did people respond to the question, but I invited them, in an open section of the survey, to make comments on their experience and why this was an issue for them, and I want to share some of those comments because they go to the very issues in the health insurance debate and the issues that have led to this bill. They reflect very much the experience of locals in this space. I'll just use people's first names, to respect their privacy. The response was enormous. In the surveys I received back, there were almost none where people did not take the opportunity to give me some direct, written feedback on what their experience of health insurance has been.

Scott from Bulli said:

I can't see value in it. I feel like it's a scam and gap fees to pay every time.

Nathan from Warrawong said:

Value for money is not good and getting worse.

An anonymous contributor from Coledale said:

We don't have health insurance because we cannot afford it. We just hope we don't get badly sick (e.g. need elective surgery etc) because we are reliant on the public health system. We hope perhaps we can afford insurance when we are older and have a higher income. I am now over 30 and it will cost more and more every year I delay.

Tianbing said:

Too expensive and cannot get much help.

Emma said:

Recent articles stating that it isn't value for money and I'm probably better of just supporting the public system. Also I don't like the rebate.

Barry from Stanwell Tops said:

Of no benefit as after paying exorbitant fees we still have to pay a $500.00 excess and then pay for each specialist over what is covered by the fund when as a public patient we would not have any of these cost. Does not make any sense to pay to be ripped off?

Natalie from Wollongong said:                                

The cost for full cover is astronomical, even if you shop around & find one that best suits your needs. I would love to be able to cancel mine, but I have serious health issues that require my hospitalisation multiple times each year.

Ross from Corrimal said:

The cost has risen so far, that with also having to pay for the gap, there is no value for money.

Hayley from East Corrimal said:

We don't see the point in it, we pay way more than what we use for benefits

Maria from Warrawong said:

Don't have it. Cannot afford it

Helen from Farmborough Heights said:

Considering my wife has to have hip replace the specialist gap is $3,150.15. Also had to pay another $400 gap for the anaesthetist plus anything else that might crop up

Stu from Thirroul said:

We can't afford to use the services that we get minor deductions on. Even the out of pocket costs for dentistry is such that we avoid going.

Lois from Austinmer said:

It very expensive, 74 and fear age related illnesses though am presently in good health but require dental and optical which are poorly covered by my private health insurance.

Sue from Woonona said:

We always end up with big gap payments. The rebate on extras like dentist and optical are ridiculous.

Janine from Corrimal said:

The only benefit of insurance is for urgent electives i.e. endometriosis, hernias, most other debilitating health issues that are NOT deemed life threatening, but you cannot wait for months / years to be treated. But the out of pocket can break you financially.

Mark from Mt Pleasant said:

The out of pocket expenses for some procedures and the ever rising costs make the products a bad deal.

Alan from Helensburgh said:

Poor value and gap difference far too high on specialists & private hospital.

Mark from Unanderra said:

There is about to be another price hike and we get no value for money. I will change it to necessities only. I pay WAY TOO MUCH for health care. It is very disappointing.

Katherine, from Figtree , says:

It costs our family nearly $300 a month for hospital and extras cover. The extras cover goes towards necessary health care—dentist, optical and physiotherapy—to keep us well and functional. However, the amount paid out by insurers against those premiums is pitiful and often a couple of extra visits to a physio for an injury will be the difference between making it from pay to pay with some money left in the bank and having to use our credit card to cover necessary costs like groceries etc. Since we are generally healthy, we rarely use the hospital cover. However, we are scared to drop the cover because of the penalties imposed both under the tax system and by the Lifetime Health Cover penalty should we want to take up cover later in life.

Private health cover is terrible value for money. We never receive the full amount back for services. We would drop our cover and rely on the public system except that we want choice when we are older. So we are paying now so that, in thirty years’ time, should we need specialist care in the private system, we are not penalised for having not held private health insurance across the life span.

Mark says:

We don't have private insurance because it's unaffordable. Also, we don't see any real benefit having it.

Lesley, from Austinmer:

When I retire it will cost $100 per week which is almost half of the pension.

David, from Wollongong:

I am finding that it is too expensive, going up more and more every year but the benefit I get from it is going down and backwards.

Michelle, from Bellambi:

We are considering to cancel the extras and pop the money in the bank instead. We are not getting value for money as the gap on items seems to be getting bigger.

Colin, from Stanwell Tops:

Pay near $4000.00 a year and still have to pay out of pocket. Been paying for 50 years.

This is just a small sample of all of those who replied to my survey.

When we talk about health insurance and the private health insurance system, we have to recognise that, while profits are up each year for the private health insurance industry—the latest official data showing that they were getting $3.7 billion more than they were paying out in benefits—there are many, many people in our community who not only feel that it's not good value for money but also are very frustrated by the fact they feel they can't give it up but they're not getting a fair go under what they get back. As many of those commenters from my survey said, the premiums continue to rise while the benefits don't seem to be improving at all.

I think it is important to acknowledge within this health insurance debate that Labor have made it clear that we want to tackle this problem. It's very important that we realise that this is a real cost-of-living pressure on families. It's no wonder that many of them, as reflected by my constituents, are considering dropping their cover. Indeed, nearly 12,000 people dropped their hospital insurance in the last three months of last year. So it is something that needs serious attention. That is why Labor have said that we will cap premium price increases at two per cent for two years, which will deliver families an average saving of $340, and shift the balance of power back in favour of consumers rather than private insurance companies. As part of that, we will also task the Productivity Commission with a sweeping review to identify long-term, sustainable ways to bring down costs and improve quality.

As we debate this bill today, another in a range of bills dealing with health insurance and the private health insurance industry, I think it is very important to listen to the voices of the people in our community. I'm sure that colleagues, not only on this side but right across the House, will have heard when they talk to their local communities that people are finding carrying the costs of their private health insurance increasingly problematic. They've had stagnant wages and their cost of living keeps going up. When the cost of health is going up as well, as many of those comments I've just read out indicate, people, sadly in some cases, don't follow through on their health purchases—purchasing pharmaceuticals, having pathology tests, going to see the specialists as they are required to do—and that has very serious health implications. Also, there are people who are doing those things and paying those costs and then finding that they don't have money for groceries, or they are putting things on the credit card that they shouldn't be and are getting themselves in more financial difficulty.

I think that it is very, very important that we understand that health insurance—not only in this bill as it affects providers, such as pathology providers, but across the board—has real implications for real families in our communities. Government needs to get serious on getting much more effective action on addressing those costs and the gap between what people are paying and the services that they feel they're reasonably receiving. I commend the amendment moved by the shadow minister. I think it is very pertinent to the health insurance debate that we acknowledge the context within which we debate it tonight.