16 July 2019

The Grattan Institute has published an interesting discussion paper that challenges the politically sacrosanct status of the private health insurance rebate: “politicians need to rethink whether or to what extent taxpayers should continue to subsidise the industry”. Paddy Manning’s summary gets to the point: “there is enough background information here to confirm what many people suspect already: with private health insurance premiums rising 30 per cent in real terms in less than a decade, and 84 per cent of policies now incorporating exclusions or excesses, this is a dud product that deserves to go into ‘a death spiral’.” He notes that while the two major parties continue to uncritically support the existing policy, “the Greens propose to axe the private health insurance rebate altogether, and redirect the billions to the public health system. That would be a better use of taxpayers’ money than subsidising the profits of private health insurers who provide patchy coverage at a skyrocketing price.”