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INSURANCE REFORM PACKAGE IGNORES THE

NEEDS OF THE MAJORITY


VIOLA KORCZAK (The Weekend Australian)
The federal Governments private health insurance reform package is a mixed bag of
policy tricks. The reform package, due to be introduced in April next year will only
deepen the divide between Australias private health insurance haves and have-nots.
The centrepiece of the Governments taxpayer-funded plan is the concept of broader
health cover, which will allow insurers to offer cover for services which they could
not in the past. This means policy holders for the first time could be covered for
treatment they receive outside hospitals. For example, receiving dialysis or
chemotherapy at home, or recuperating in a hotel, will be covered by private
insurance. The premise is that this will take pressure off the public hospital system
because more treatment will be undertaken outside the hospital setting. But it is only
the 43 per cent of consumers with private health insurance who will benefit from
these changes, making it unlikely that the policy will make public hospital waiting
lists disappear.
The concept of broader health cover will also include access to preventative care
treatments for policy holders. Preventative care encourages people to stay well rather
than just treating illness when it develops. It can involve getting regular check-ups
and making positive lifestyle changes, such as regular exercise and an appropriate
balanced diet.
Consumer organisation Choice welcomes the preventative health care measures
included in the reforms. Public health specialists around the world have been calling
for them for years. Yet in the governments overhaul of the private health sector, only
those with private cover will benefit. The majority of Australians will get left behind.
Despite the bells and whistles included in the new package, private health insurance is
just not an option for many Australians. They simply cannot afford it. Private health
insurance can cost the average cash-strapped family between 3 and 4 per cent of their
annual income. For single parent families, the picture is bleaker. Australian Bureau of
Statistics figures show that 54 per cent of this group receive government benefits,
leaving them with far less discretionary spending power. For this group, affording
private health insurance is pier in the sky. Future premium increases will squeeze out
most struggling families, particularly those on lower incomes.
A worrying precedent has already been set. Over the last five years, premiums have
increased by 40.9 per cent. Thats a rise equivalent to double the rate of inflation each
year since 2001. Given the rising cost of premiums, it is no wonder that consumers on
higher incomes are more likely to take out private cover.
While Choice supports consumers right to choose between the private and the public
sector, Australia prides itself on being an egalitarian nation. The idea of a fair go still
forms the foundation of our society. Yet here we have a situation where all taxpayers
are funding a system which mainly benefits those on higher incomes who can afford

to pay for better services. All taxpayers fund the 30 percent private health insurance
rebate at a cost of $3 billion a year. Yet the 57 per cent of people without insurance
are being left out in the cold. In addition, taxpayers are also footing the bill for the
marketing of private health insurance.
In his last speech, Treasurer Peter Costello said that the Government would spend
$55million over the next four years to increase consumer awareness of the incentives
and benefits associated with private health insurance.
The industry should be thrilled to have its marketing campaign underwritten by
Australian taxpayers. This money, together with the $3 billion rebate, would be better
spent on reinvigorating the public health care system, rather than propping up the
private sector.
So, what is the solution? How the public system is funded is critical. The current
commonwealth/state funding model of public hospitals is inefficient and wastes
resources. The health system is also being crippled by workforce shortages, especially
in rural areas. Australia is in dire need of not just doctors and nurses, but also allied
health professionals such as physiotherapists, dieticians and podiatrists.
Underpinning the success of these measures is a government willing to engage
consumers in a health care debate. Governments in Canada and the UK have
successfully involved consumers in designing their healthcare systems. Australia can
learn some important lessons from this egalitarian approach. Healthcare reform is not
just about redistributing the current health care dollar. It is about finding a lasting
solution that goes beyond election cycles and political expediency. It requires a
government with the courage to undertake reforms bases on asses not income.
Viola Korczak is health policy officer at the consumer organisation Choice.

Insurance reform package ignores the needs of the majority


The Australian 14/10/06
OET reading style questions
1.

Based on paragraph 1 & 2 which statement is true?


a) Opinions about the governments private health insurance reform package are divided
b) the governments private health insurance reform package was introduced in April
c) Will help both people with private health insurance and those without it
d) None of the above

2.

The insurance policy is criticised because


a) The majority of the people will not gain from new system
b) people who receive treatment at home will not be covered by insurance
c) It will not reduce the wait lists at public and private hospitals
d) It should have been introduced a long time ago

3.

The expression discretionary spending power means


a) Unrestricted spending power
b) limited spending power
c) freedom to spend money based on individual needs
d) all of the above

4.

Which of the following statements is true


a) Hospital fees have increased more than 40% in recent years
b) The rate of inflation has doubled every year for the past 5 years
c) In recent years the price of health insurance has been increasing twice as fast as
inflation
d) All of the above

5.

Which of the following statistics is true


a) 70% of tax payers money is spent on health
b) Over a 12 month period the health insurance rebate costs tax payers 3 billion dollars
c) 30% of tax payers money is spent on health
d) 57% of people do not receive adequate treatment for colds

6.

Which of the following is not mentioned as a problem in the health system


a) lack of qualified staff
b) inefficiency
c) wastefulness
d) lack of rural hospitals

Understanding meaning from context: Try to work out the meaning of the following
expressions from the article. Use a dictionary and the internet to find out the
meaning.
1. mixed bag of policy tricks
2. deepen the divide
3. Despite the bells and whistles of the package
4. cash strapped family
5. a bleak picture
6. affording health insurance is pie in the sky
7. squeeze out
8. egalitarian nation
9. to foot the bill
10. to be left out in the cold

Insurance Reform

Answer Sheet

Question 1
a) Incorrect: Untrue
b) Incorrect: Untrue
c) Incorrect: Untrue
d) Correct
Question 2
a) Correct: Yet in the governments overhaul of the private health sector, only those with private cover will benefit.
The majority of Australians will get left behind.
b) Incorrect
c) Incorrect: ..a cure for arthritis has proved elusive. Elusive is synonym for hard to find
d) Incorrect
Question 3
a) Incorrect
b) Incorrect
c) Correct (best choice)
d) Incorrect
Question 4:
a) Incorrect
b) Incorrect
c) Correct: . Over the last five years, premiums have increased by 40.9 per cent. Thats a rise equivalent to double
the rate of inflation each year since 2001
d) Incorrect
Question 5
a) Incorrect
b) Correct: All taxpayers fund the 30 percent private health insurance rebate at a cost of $3 billion a year.
c) Incorrect:
d) Incorrect:
Question 6
a) Incorrect: Mentioned: The health system is also being crippled by workforce shortages, especially in rural areas. Australia
is in dire need of not just doctors and nurses, but also allied health professionals such as physiotherapists, dieticians and
podiatrists.
b) Incorrect: Mentioned: The current commonwealth/state funding model of public hospitals is inefficient and wastes
resources.
c) Incorrect Mentioned: The current commonwealth/state funding model of public hospitals is inefficient and wastes
resources.
d) Correct: Not mentioned

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