If you are among the 67 per cent of people in Newcastle with health cover, the Minns government's plan to tax you from next year is bad news for your hip pocket, and your health.
The cash grab will add about $114 to the cost of an average silver health insurance policy next year. In a cost-of-living crisis, the timing could not be worse. Our modelling shows the tax, designed to fix a hole in the government's budget, will cause about 60,000 people to drop their health insurance altogether, forcing them to rely on our overwhelmed public hospital system.
This will further blow out waiting times for elective surgery when the public system is already at breaking point. NSW has the longest wait times in Australia for elective surgery, causing many people to wait years for procedures including cataract surgery, hip and knee replacements, and grommets to help children hear.
Treasurer Daniel Mookhey has accused health funds of not paying enough for their members who received single rooms in public hospitals ('Private insurers short-changing hospitals and the state', Herald 2/10). He said the government was simply chasing money it was owed. This is rubbish.
Australian Prudential Regulation Authority data shows health funds subsidised NSW public hospitals to the tune of $3 billion over the past five years. They've done this while keeping premium rises below inflation for 15 million Australians.
Contrary to the Treasurer's claims, health funds covering 90 per cent of the market in NSW are paying the legal Commonwealth Government rate for their members who receive single rooms in public hospitals ($421 a day). Mr Mookhey wants to charge $892 for this privilege to fill his coffers.
Will public hospital staff recruiting people with health insurance in emergency departments now be forced to admit them to a single room to raise the cash? Even though single rooms should be prioritised for people with infectious diseases, immunocompromised people such a cancer patients and women giving birth?
We all pay taxes for equal treatment in public hospitals, so I'm not sure how the government thought they would spruik this policy in the public interest.
When health funds pushed back on this plan, the government instead threatened to increase a little-known tax on health insurance in NSW to raise the desired $140 million a year. They did this behind closed doors in letters to health funds in the hope it would never see the light of day.
Regardless of the way the NSW government tries to collect the money, it is disastrous for people working hard to contribute to their healthcare via health insurance. These people are taking pressure off our public hospital system so it's there for those who need it most. It will also be catastrophic for people relying on public hospitals for emergency care and planned treatment, including elective surgery. People will have to wait longer for life-changing surgery.
Four million people in NSW have health insurance. The government's tax will make it the most expensive state in the country to hold health cover.
In an attempt to demonise health funds, Mr Mookhey also accused the relevant health funds of making profits, including those who are not-for-profit. This displays shocking ignorance of how the private health system works. Under Australian law, health funds must make sure they have enough money on hand to pay for their members' future care.
This year, health insurance premiums rose 3.03 per cent on average. At the same time, car and home insurance surged 16 per cent.
It's no secret our ageing population and chronic diseases like diabetes are driving up costs for health funds. In the year to June 30, health funds paid hospitals 8 per cent more than the previous year for members' hospital claims. Health funds will always put their members first, but they cannot keep chasing inflation and rising claims without putting up premiums to remain viable. An extra tax just means higher prices for everyone.
If the NSW government wants its people to keep funding their own healthcare via health insurance, it must find a new way to plug the hole in its budget.
