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Fed. Budget - time for full story on health



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AUSTRALIAN NURSING FEDERATION Federal Secretary: Jill Illffe Assistant Federal Secretary: Denis Jones

Ph: 03-9639 5211 PRESSRELEASE

ATTENTION: POLITICAL/HEALTH REPORTERS

11 May 1999 - 10.00pm

FED. BUDGET - TIME FOR FULL STORY ON HEALTH PRIVA TE HEALTH INSURANCE TARGET WILL HURT PUBLIC HOSPITALS NOT HELP THEM

Media reports tonight that the latest Federal Government private health insurance initiatives are aimed at lifting coverage to at least 36% will cut about $200 million from Australia’s public hospitals the Australian Nursing Federation (ANF) said tonight.

As part o f its 1999-2000 budget the Federal Government has announced a new private health insurance policy aimed at getting younger people, who do not actually consume large amounts o f health services, into so-called lifetime private health insurance. This is aimed at subsidising those people with insurance who are consuming health services.

ANF federal secretary, Jill Iliffe, said that under the current Healthcare Agreements, private health insurance coverage o f 36% or more would actually put pressure on State and Territory health budgets and increase the pressure on public hospitals.

“Much has been made of how the Healthcare Agreements increase federal payments to the States and Territories if private health insurance coverage drops. However, the Healthcare Agreements also contain an arrangement that cuts federal funding if private health insurance coverage gets above a certain figure.

“The ANF understands that if private health insurance coverage climbs above a certain figure in a State or Territory, then that State or Territory starts losing about $450.00 per extra person covered. The coverage threshold figures in each State and Territory that has signed the Agreement arc - NSW 34.3%; Qld 30.4%; Vic 32.2%; SA 33.1%; NT 25.9%; ACT 36.6%.

“We are advised the averaged national figure is 33.6% and there is a combined national loss o f $82 million for every one per cent increase above this. So at a national average o f 36%, the States and Territories stand to lose a total of $197 million. I f it goes to 38% the States could

lose $360 million per year. Queensland, for example, will lose about $15 million per year for every one per cent its coverage exceeds 30.4%.

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“Such an arrangement will not take the pressure off public hospitals. It simply transfers money from the public sector to the private sector and will substantially decrease the capacity o f the States and Tnritories to provide public hospital services. They will lose public hospital money, even though there is no evidence public hospital demand will drop.

“There seems to be an assumption that a person with private health insurance will not use the public system. This is a very dangerous assumption on which to assess the future workloads o f public hospitals. People with health insurance are still dependent on the public system for a wide range o f services, especially if they live in areas where private hospitals are scarce or non-existent. And getting young people, who are not big consumers o f health services, into private health insurance will have limited impact on public health services.

“Given ihe Federal Government’s emphasis on taking pressure off public hospitals, it must clearly outline the operation of the Healthcare Agreements in this regard. As the Parliament prepares to consider this latest private health insurance policy over the coming months, this issue should be clarified and fully debated,” Ms Iliffe said.

End

Media inquiries: Jill Iliffe 0419-576 $90 John Moran 07-3355 0803; 0411-603 279

The approximate cuts to federal public hospital funding in the following States & Territories, as private health insurance coverage Increases, are as follows. The Federal Government must clarify the situation.

Stale NSW vie Qld SA ACT NT

PHI cover September 1998

30.4% 29.5% 28.4% 31.0% In NSW

figure

23.4%

Funding loss Threshold

34.3% 32.2% 30.4% 33.1% 36.6% 25.9%

Loss per 1% rise

$27 million

$20.5 million

$15

million

$7.5 million

'$2.5 million

$0.8 million

31% cover Nil Nil $9m Nil Nil $4.1m

32% cover Nil Nil $24m NU Nil $4.9m

33% cover Nil $ 16.4m $3 9m Nil Nil $5.7m

34% cover Nil $36.9m $54m $6.8m Nil $6.5m

35% cover $19m $57.4m 569m $ 14.3m Nil $7.3m

36% cover $46m $77.9m $84m $21.8m -Nil $8.1m

37% cover $73m $98.4m $99m $29.3m $1.0m $8.9m

38% cover $100m $118.9m $114m $36.8m $3.5m $9.8m

39% cover $l27m $139.4m $129m $44.3m $6.0m $10.7m

1 40% cover .SI 54m $ 159.9m $144m | $51.8m $8.5m $11.5m