Private Healthcare Australia has used its 2020-21 Budget submission to restate its call for the federal government to restore the private health insurance rebate to 30 per cent for younger Australians and working families.
"First, participation of younger people needs to be better incentivised to stabilise premiums for everyone. Working middle-income families with young children are bearing a disproportionate share of the cost of private health as they cross-subsidise a large, baby-boomer cohort, who at the average age of 72 are claiming record numbers of procedures," it says.
"The rebate should be restored to 30% for this cohort. Providing subsidies to private health insurance is the most cost-effective way for the Australian Government to support the growth in hospital and health services over the coming decades."
The rebate's contribution to premiums has declined over the past decade driven by reforms including means-testing and a lower level of indexation.
The association said, "Subsidies for private health insurance-funded services cost the Commonwealth Budget around 30 cents in the dollar. The alternative, providing more services in public hospitals, costs the Commonwealth Budget 45 cents in the dollar."
It also calls for the removal of fringe benefits tax from employer-provided private health insurance, an increase in the Medicare Levy Surcharge, and measures designed to reduce costs.
"Australia’s healthcare costs will tend to rise due to our ageing population, rising chronic disease and complex multimorbidity, and higher expectations for care quality. However, structural characteristics of our system affect health inflation, including the cost of prostheses, cost-shifting, wasteful spending and inefficient pricing."
It adds, "The key areas of private healthcare expenditure are private hospital costs, medical fees, primary care fees (for general treatment which covers dental and other allied health in the community) and public hospitals. The areas of costs growing most rapidly include prostheses and state government charging for private patients in public hospitals, as outlined previously."
The association uses its submission to argue for the creation of a national independent body to manage the procurement of prostheses, including the adoption of international reference pricing, but also suggests complete deregulation as an option.