The Medicare levy surcharge is, in my opinion, an stupid tax designed to force some people into getting private health insurance, whether they want it or not, by taxing them more than the cost of the premium if they don’t, all in order to subsidise the otherwise unprofitable private health industry.
I earn enough to be stung by it, but with the insurers bumping up premiums, it’s getting close to the point where the costs are comparable. My Medibank Private policy (covering myself and the kids, for hospital) jumps about 10% this month to $99.60 per month. By my rough calculations that’s now quite a bit more than the surcharge would cost me.
At the same time the premium jumps, the brochure says a bunch of services that were previously “Restricted” will no longer be covered at all — including major eye surgery, assisted reproductive services, renal dialysis, and hip and knee joint replacement surgery.
Not that I expect to need any of these anyway (in fact, I never, ever, claim anything). But they’ve got some cheek marketing it as giving me “more certainty about the benefits you can receive”.
Meanwhile, we’ve found that Jeremy’s going to need braces. Not that he’s delighted, but he understands that now is the best time to do it, while he’s growing.
I don’t know how much it may end up costing at this stage, but the Australian Society of Orthodontists says fees involved can vary between $4500 and $8000. Ouch. I should find out in a few weeks what I’m looking at, but even if I wanted to join a health fund, there’s a 12 month waiting period for orthodontic benefits.
How much would I get back if I did have major dental cover? Comparing a few of the policies on the government’s private health insurance comparison web site, it would seem that as is typical in this game, the benefits from the fund for orthodontic work are far, far out-weighed by the premiums.
If I wanted that cover, I’d be paying more than $1000 per year more to Medibank, for a maximum benefit of $300 per year (though it may rise a bit each year).
Now, I’m not expecting them to hand out so much money that they go broke. But surely for something for which there is a waiting period, which is a major dental expense, for which you pay a huge extra premium to be covered, and is likely to be once per lifetime for people (if it’s done properly), they could do better than a measly $300 per year? Surely that’s the sort of case where (in that year), the insurance company should pay out more than you’ve been paying in.
Even looking around at other companies’ plans, I could have been paying $2000 per year more than at present, and only be getting 75% of the cost back, which is also not a winning proposition given the cost of the braces is likely to be spread over several years.
Insurance is a little like gambling, but it seems incredibly unlikely that anything will happen other than the private health insurers making money hand over fist.
Perhaps I’m misreading all this information I’m looking at (it’s amazingly complicated; looking through iSelect as well helped a bit), but I come away with the impression that even if you make some claims, private health insurance in Australia is a ripoff, unless you’re chronically unwell and repeatedly claim for a wide range of different services (eg not too much of anything so you hit any annual limits).
And of course these premiums are after the 30% private health insurance rebate has been applied. The rebate is a massive subsidy of the private insurance companies, costing around $4 billion a year — apparently up from $2.6 billion back in 2003-04.
Jeez; I can think of better ways of spending that amount of dosh in the health sector without propping-up inherently unprofitable enterprises, but for all the talk of reform in health, that seems to be one Howard government policy Mr Rudd apparently doesn’t want to roll back.