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Legislative Assembly for the ACT: 2003 Week 1 Hansard (19 February) . . Page.. 141 ..

MS MacDONALD (continuing):

We all remember the federal government's "We're closing the gap"television commercials-the 30 per cent rebate for private health cover illustrated with brightly coloured umbrellas. But the umbrellas proved leaky, and the gap remained open. The rebate has been a comprehensive and expensive failure. It aimed to increase private funding to the health care system despite remaining gaps in private cover. But private funding has actually fallen by about 26 per cent since the rebate was introduced.

Yesterday it was revealed that almost 200,000 under-40s had cancelled their private hospital cover in the past two years. Almost 12,000 of these people cancelled their cover in the past three months. Young people are leaving in droves, according to Australia Institute executive director Clive Hamilton.

As health expert John Deeble-already quoted-an ANU visiting fellow and an architect of Medicare, said in a scathing report to ministers, "The Commonwealth has simply replaced private funding with over $2 billion of its own."Of course, this money could have gone to the public sector, which would have been faster and fairer. Deeble points out that for additional grants equal to the rebate cost, "The public hospitals could treat almost 60 per cent of all the patients now treated in the private system."

The cost to the Commonwealth will continue to grow if the rebate remains in place. The Commonwealth government is supporting private health insurers at the expense of consumers. Medibank Private and MBF last month applied for permission to increase premiums, putting private cover even further out of reach of low income earners.

Even their own employees might struggle to afford private health cover. I can say from my experience of having worked for the Australian Services Union, who cover virtually all of the private health insurance companies, that the ASU has found that health insurers treat their staff poorly in most cases.

Even if you do not have private health insurance, the rebate is costing you through tax. It is a catch-22 situation. Doctors' Reform Society president Tim Woodruff told the Canberra Times that, "all Australians were, in effect, forking out for higher premiums through paying the 30 per cent private health insurance rebate."

Despite the money the Commonwealth is pouring into private health cover, private in-patients should still be warned to mind the gap. CHOICE, the Australian Consumers' Association's magazine, recently published two examples of this. In one, a young woman who had a hip replacement was discharged quickly, meaning that most of her treatment, such as X-rays and physiotherapy, was provided to her as an outpatient. Outpatient costs are not fully covered by private insurance, so she had to pay, while her bed was freed up for what CHOICE called "a more profitable patient".

Similarly, a woman gave birth to her child in a private hospital, but her healthy baby was considered an outpatient. She was unable to claim the gap between the Medicare rebate and the scheduled fee for basic paediatric services.

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