Losing Medicare: The Jewel in the Crown


There’s a great moment in Al Gore’s Oscar-winning documentary, An Inconvenient Truth, where he explains how global warming crept up on us. According to Gore, if you drop a frog into a beaker of hot water it’ll get one hell of a shock. But sit it in a beaker of cold water, increase the temperature gradually, and sooner or later it will be boiled meat and the frog will never have seen it coming. Gore’s point is that change happens gradually and often we barely notice it.

In Australia big changes have been happening little by little, right under our noses. For decades, Medicare was the jewel in our health policy crown. When it began in 1975, Medicare (then Medibank) was a complex system based on a single, simple idea: that all Australians have a right to adequate health care, regardless of their station, and that no Australian should ever receive inferior medical treatment simply because they couldn’t afford it.

The major Parties have traditionally had fundamentally different positions on Medicare. Federal Shadow Health Minister Nicola Roxon last week called this the ‘old public/private debate’: Communitarians on the one hand, valuing a universal, taxpayer-funded system; individualists and economic rationalists on the other, favouring a competitive, free-market approach. John Howard falls into the latter category. Having never made a secret of his distaste for Medicare, Howard’s philosophy, put simply, is that users should pay for health care because health is a private, rather than a State, concern.

When he was elected in 1996, Howard wanted to introduce sweeping health care reforms. But Howard is a clever man. He knew that Australians would never tolerate the wholesale destruction of Medicare, a system of which they are proud. And so he set about to slowly chip away at this once glorious beast, until only its rotting carcass remained.

By January 1999 he had introduced the 30 per cent private health insurance rebate,  whereby those willing to acquire private health cover would have a portion of their premium paid out of the public purse. The Government brazenly claimed that the rebate would offer a helping hand to those who wanted private cover but who couldn’t afford it without assistance.

The Coalition’s real agenda was to restructure the health system enticing enough people away from public health so that it eventually became redundant. To this end, its taxation schemes have been cunning and effective: the Medicare Levy Surcharge works to compel people to acquire private health cover by financially penalising any single person earning over $50,000 a year who does not have such cover.

Interestingly, the $50,000 threshold is not indexed. And so as wages rise, more and more people have been caught above this arbitrary line and are now subject to a financial penalty unless they too acquire private cover. Given the circumstances, is it any wonder that around 43 per cent of Australians now have private cover?

The rebate itself is replete with problems. It is not means tested, benefits the wealthiest members of society and props up inefficient private health insurance companies. Worst of all, it does nothing to bolster the grossly underfunded public system which still services the majority of Australians.

The Government would have us believe that it is important to support those acquiring private cover, because these people are helping to ease ‘pressures’ on the public system. They pretend that stresses on the public system have nothing to do with their neglect of it; that as long as the demand for the dilapidated public system is decreasing, there’s less need for governments to keep funding it.

Thanks to emo

For the most part, Labor has maintained its support for the jewel in the crown (although they have supported some of Howard’s changes for instance, the 30 per cent rebate). In recent years, Labor has opposed higher rebates to those aged over 65 by arguing that, among other things, public monies are better spent on boosting the public system than on propping up the private one.

But last week, in a stunning turnaround, Shadow Health Minister Nicola Roxon confirmed that Labor had abandoned its opposition to higher rebates for the elderly. Labor now recognised that times were changing, that people were freely choosing to obtain private cover and that the Party needed to move with the times. Unsurprisingly, Labor’s about-face was met with great enthusiasm by the Australian Health Insurance Association, the private health insurance industry’s peak body, whose members, along with wealthier Australians, stand to benefit most from Labor’s policy back down.

But according to Dr Tim Woodruff, President of the Doctors Reform Society, Roxon’s statement ‘should be of great concern to the 65 per cent of over-65-year-olds who don’t have private health insurance.’ In a scathing attack on Labor, Woodruff said that Labor’s policy shift, ‘would appear to indicate that the needs of the majority of Australians are to be seen as less important than the needs of those lucky Australians who can afford private health insurance.’

Roxon rejects any suggestion that Labor has abandoned its support for the public health care system. Rather, the Party is ‘committed to supporting Australians who make [the]choice’ to obtain private cover. She suggests that the old public/private debate ‘has had its day’, and that Labor is dedicated to maintaining both the private and public systems to ‘world class’ standards. But, as Woodruff points out, there are major disparities between those systems. Public patients may wait for 18 months for surgery, while their wealthier neighbours, subsidised by the public patient’s tax dollars, can have the same operation within weeks.

Labor should know that a properly funded public health care system is crucial for many reasons, not least because it is the poor, the socio-economically disadvantaged, the mentally ill and Indigenous Australians who get sick most often. They are also the ones who rely most on a properly funded Medicare system and who desperately need Labor to stand up for them.

The rest of us are not immune either. All of us will be struck down by illness at some stage in our lives. If one day we can no longer work, and find ourselves unable to afford our private health premiums, we will come looking for Medicare’s help.

Al Gore’s timely lesson is that change often happens gradually. Before we know it we look back and realise that things have changed irrevocably, and for the worse. If we’re not careful, we’ll soon find ourselves with a second-rate public health care system. And by then it may be too late.

Labor should have stuck to its guns on this one.

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