Then what's the point of having private health insurance?

This sounds like just another scheme to help the 10% of people out there who can't organise themselves enough to take care of their own lives, which means the rest of us have to put up with nanny like rubbish like this.

Here's a novel idea - people actually just voluntarily save a small part of their income in case they need it at some stage in their life. How radical is that? Imagine actually taking some responsibility for your own bloody wellbeing.

No, let's rather bring in another form of coercion to help the fools in society who don't want to or are unable to do their own thinking.

While I personally would prefer to get the money back in the form of lower taxes, if the money did have to go into health, this is a pretty good way to do it.

Clearly, the policy needs some tweaking - for example, how do immigrants or new children get access to this? And equally, what happens to the money when people leave the country?

But that aside, this is quite a good idea. What I really like about it is that it introduces a level of personal responsibility into the system - if you do things like drink while pregnant or when you're driving, or if you smoke which make it more likely that you'll need heathcare, then you're going to drain your account more quickly. The power is in your hands.

I think that's an important concept to get into the health system, and if this is the way to do it then I'm happy

The thing about health insurance is that the people who have the highest incomes don't use the health system. If you become sick or have an accident you use health care. However if you are sick for more than 3 months can you afford to keep paying health insurance. As most Asutralians are 2 paypackets away from financial ruin the answer is that most Asutralians can't afford health insurance premiums if they are not working.

Then there is the statistic that people use health services heavily in their last 2 years of life whether they die of old age or die young.

If you are deemed chronically ill even if you pay your health insurance premiums you may be treated as though you are a public patient, this applies to all car accident patients and elderly patient.

Kevvy - a very complex shifting of deckchairs, just build a bridge, get over it and accept that the most efficient way of providing health care for those who need it is to lose the tax rebates on private health insurance.

Why not forgetthe tax cuts and use the money for setting up measures to allow for health continuance. Okay for the younger since when old such options may be less relevant. To gain some control the measures could carry a loding of patient cost for those who have not availed themselves of check ups and life style measures.

I don't remember the words used in the election promise regarding tax cuts but I'm fairly confident that most people interpreted the promise to mean tax cuts which gave them control over the money. This proposal would leave most people feeling that the government had not been honest with them. While we may be used to that feeling it's not a habit I'd want to encourage.

That point aside if the approach of using the money in a way that did not add it to the retail market was taken I'd rather see the money offsetting my mortgage (maybe with some provisions which stopped me refinancing against it or getting direct access if I sold my home etc so that it did not create inflationary pressures).

At a guess there are a whole bunch of other ways it could be used and depending on their circumstances different people would have different priorities.

Even more to the point I want control over my own earnings rather than having a paternalistic outsider determining how my income should be used. The tax burden is bad enough without having others controlling how the remainder is used.

R0bert

Wait until they bring out a bank account for your groceries - we'll have to divert a percentage of our wages or tax cuts into the tax-free Grocery account, which is only allowed to be spent at registered grocery stores.

Then we will no doubt get the Clothing Account, Childern School Lunches Account and Gym Club Membership Account to go with our Superannuation Account, First Home Owner Deposit Account and our Medical Expenses Account.

Heaven help us, the world has gone crazy. Where has self-responsibility gone?

Rudd has plenty of advisors and schemes, or more correctly, schemers and he is determined to wreck the social infrastructure. He has already indicated his hand with surgery times pushed back another 2 months, that is from 3 months to 5 months. As well, I mentioned on this forum about 3 months ago that Rudd would privatise and hand over to his cronies the whole electrical infrastructure dressed up with an accompanying political cover 'it is being done for the benefit or good of society.'
Rudd supports to the hilt private health care, privatisation, turning everything into a commodity - in order to rob society. On behalf of the smallest minority in society, the moneyed elite who make all the decisions at the expense of society. A few profiteers who see enormous potential and a ready made market in healthcare (ironic care)that can be manipulated and milked. Like George Bush's infamous declaration "some people fight for the have nots - I fight for the haves." The first step is to create a contrived waiting list. Privatisation is a criminal act of large proportions which is not possible without the cover up from the media.

Hi Kevin

You've written an interesting article on health funding here. I've extracted a snippet an posted it on http://privatehealthinsurance.blogspot.com/ with a link to your full article.

Good health is perhaps along with good education the most important policy objective any federal government should have.

One of my main themes on my health insurane blog, is that the privatisation of health insurance via NIB listing and British for profit BUPS/HBA taking over non-profit MBF threatens the survival of the health insurance industry.

The reason?

The federal government 30-40% rebate may not last too long when the public realises more than $1 billion of taxpayer money will soon start propping up profits via dividends to NIB's shareholders and profits going offshore to BUPA.

Non-profit health funds work for the general good and the focus is on paying claims not dividends.

Anyway, if you're curious about the goings on in the private health insurance industry (where I work for a non-profit health fund) please feel welcome to post a comment at http://privatehealthinsurance.blogspot.com/

Cheers,
Mr Health Insurance

This idea will please the BANKS.

Thanks for your comments.

The main argument against the proposal is that it is better to have no taxation used on health services and to cut taxes and then let people decide how to spend money as they see fit. This proposal is all about giving more control to individuals but in a system where governments fund health services from taxation and that is not going to stop.

Most Australians believe that there is a role for governments in providing health services as part of the social contract. The issue then becomes the best way for the government to spend taxes on health. This proposal is an efficient way for the community to spend the taxes by giving individuals more responsibility and choice. Those who argue that this is a "nanny state proposal" have misunderstood the basic premise which is to give more control to individuals within a social equity framework.

We all know that a straight taxation cut at the current time will lead to inflation. This is an attempt to have a tax cut with a lower inflationary impact.

There is some support for the concept from the US at http://www.hsacoalition.org/?p=167&print=1

For the life of me I cannot understand why health is not tackled properly by reducing the causes of dis-ease and ill health rather than this fascination with "building faster ambulances".

Why not ban smoking, or render ineligible for unpaid healthcare, those who choose to smoke? Screw the taxes, screw the comparatively miniscule number of jobs that would vanish. The reduction(eventually)in palliative care costs for those suffering essentially self-inflicted injuries would compensate for the loss. Don't give me any rubbish about addiction either. I'm an ex-smoker and refute the addiction argument.It's a breakable habit, like most "addictions".

Yes, give us the power to utilise our tax cuts as we see fit but go further and reward those who engage in proactive health measures and don't reward those who don't.

Lifestyle choices cause our bodies disease (break the word up, our bodies become ill at ease, way out of homeostatic balance) and we react by relying on the health care system and drug companies to save the day. WAKE UP! It does not make economic sense for a drug company to cure people for, say, $1000. It makes more sense to put people on a lifetime course of a $1 pill per day for the rest of their lives. No longevity in cures!

Be proactive if you're serious about health. Spend it preventively, not reactively. Ditch Maccas, drink clean water, eat more fresh fruit and vegetables. Even better, grow your own, before Monsanto changes everything!

2legit,

I agree entirely with what you are saying and an extension of the system proposed for the tax cuts going to a health account is to use the health account as a way of rewarding people not to get sick:)

We are working on an expansion of the idea and we will be launching a website in the New Year explaining how this - amongst other things - can be done.

The essential ideas are to

1. Reward people for doing things that promote their own and the communities well being with respect to health in its broadest sense
2. Get some of the money to pay these people whose actions cause problems - like the sellers of cigarettes and alcohol and illicit drugs.
3. Require people to use their Rewards on ways to improve health of themselves and the community.

The approach applies to most activities that have a community aspect to them (and isn't that most activities). To give you an example.

Pay people to generate less greenhouse gases in their daily lives
Get the money from people who generate more greenhouse gases to pay the people who generate less greenhouse gases.
Require the money to be spent on ways to reduce greenhouse gases.

2legit - if you are born you will eventually die. In your last 2 years of life you will consume the most health care dollars. If a child dies then those health costs are not offset by the individuals work. If a individual dies at age 65 after working for a life time then society has recouped the health care costs, irrespective of whether they smoked, ate meat or indulged in tantric sex.

I can see no value in adding another layer of complexity to the health system, those who get really sick are in no position to pay for their treatment and I don't want to be like America where sick people live in fear and pain because they can't afford to see a doctor, even for chronic conditions like psoriasis.

Countryboy

If kevin Rudd wants to improve the life style of many children he will enforce centerlink to take twenty dollars a week from welfare payments[or less] so they can be in private health care.

He will identify drug addicts, alcoholics and mental patients and do like wise.

He will put these people under the control of the public trustee where by their funds are controlled so they cant wait for dole day to spend it all at the put or a few hits then be back asking for more hand outs and more of our hard earned public purse.
I couldnt agree more with your coments above.

I think there must come a time where the tax payers are ging to have to say= No more us breaking our backs and time you took reasonsibilty for your own lives and the children you decide to bring into this world without the means to support them.

We are breeding a nation of irresponsible blugers that encourages the world to come to 0Z and demand your free ride.

We see the results every day of the irresponsible people who have few laws ensuring their children and pets suffer.
Time for some personal reasonsibilty.
Well past time.

This proposal is valuable and has some strong advantages over the status quo in health funding. First, it opens up a way of funding consumers (patients) rather than providers and governments. Because our health system it totally provider-centred and provider-dominated, establishing ways of funding the consumer is critical to reform. Without it we can't have anything like a market in health care. Funding the consumer is the only effective way out of the commonwealth/state funding impasse.

Second,it is relatively simple to commence, and that makes it a useful tool in the complex business of initiative health care reform.

That said, I think it is easier politically to commence this kind of approach in more specific fields of care, such as chronic illness, disability and aged care. The National Federation of Parents, Families and Carers has proposed the establishment of an Office of Family Accounts in the Department of Prime Minister and Cabinet to hold and allocate public funding in disability and aged care on behalf of families caring with a person in these situations. General funding would be allocated directly into these accounts - instead of paid into the coffers of providers (the middle men) where there is huge waste and inefficiency.

Politically, it is probably best to have created the accounts first through an prior initiative like this one, then begin shifting resources that might otherwise be earmarked as tax cuts. Shifting resources from the providers to the consumers will be a process that will be resisted strongly by the provider interests (doctors, hospitals, state governments).

Vern Hughes
vern@civilsociety.org.au