2 social solidarity insurance premiums do not vary

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2. Social solidarity: Insurance premiums do not vary according to health risk. Australia encourages private supplementary insurance by tax measures, one such being the 30% tax rebate. The use of the tax system since 1997-98 to provide subsidies to the health insurance industry directly contradicts the thrust (increased progressivity) of the Government’s tax reform agenda. Subsidies will soon cost around $3 billion and are skewed heavily towards the affluent – half the subsidy goes to the top 20% of tax-payers, and nearly three quarters goes to the top 40%. Some of the subsidy goes towards ancillaries – non-hospital care costs – including insurer administration. Furthermore, a recent study of private insurance purchasing trends shows that the rebate has failed to reduce public sector spending or significantly increase membership of private funds. The sharp increase in
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16 2 For details see Butler, J. ‘Policy change and private health insurance: Did the cheapest policy do the trick?’ National Centre for Epidemiology and population Health. The Australian National University, 2001. 3 Tax incentives are considered weak in the Netherlands and Germany. French employees with employer-paid VHI (48% of households) may deduct the premium amount from taxable income. French employers purchasing commercial VHI pay a seven per cent insurance premium tax. This does not apply to employers purchasing mutual insurance. For details see Mossialos and Thomson (2002). 4 There are also small, supplementary insurance markets in Germany and the Netherlands mainly covering treatments that are excluded from statutory packages, dental care being the most common. In the Netherlands, although 93% of the ZFW insured population purchase supplementary insurance, the sector only accounted for just over 2% of THE in 1999. membership was not due to cash incentives but from deregulation of health funds and the introduction of life-time cover rules. 2 3. Consumer empowerment and patient satisfaction : Privately insured patients have greater choice of hospital provider (public and private), and of doctor. In general, Australian patient satisfaction has fallen recently, in light of longer waiting lists and consumer costs, but these elements are less pressing on the privately insured. 4. Quality of care : As private patients are free to choose and change their doctors, those treating the privately insured have a financial incentive to provide high quality care. For example, salaried specialist doctors in public hospitals often have rights to treat some patients in those hospitals as private patients, charging fees and usually contributing some of that fee income to the hospital. 5. Clinical autonomy : The foundation of the debate about public/private financing is the constitutional amendment of 1946 which protects the right of private practice. This states that the Commonwealth may provide "pharmaceutical, sickness and hospital benefits, medical and dental services (but not so as to authorise any form of civil conscription)". In effect, this means that
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  • Fall '18
  • Universal health care

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