OPINION: Is it time to ditch the private health insurance rebate? It's a question Labor can't ignore
— in effect, kicking the policy can two years down the road.
Whichever party wins the election, it ought to revisit our nation's history with failing industries. Over recent decades we have learnt that propping up industries in the face of consumers turning away from their products is not a long-term proposition. Private health insurance is no car industry, but it's not a sunrise industry either. Yet it receives a greater subsidy than manufacturing at itsThe government has to decide why it's subsidising the private health care industry. If it decides it doesn't want to in future, it needs a carefully managed transition.
Even if private care is seen primarily as a substitute for the public sector — and a way to take some demand off — subsidies for private care may be counter-productive.harder for public hospitals to attract staffAustralians feel pressured to take out private health insurance because of the sticks, but the product is only sustainable with its current level of coverage because of the carrots: the hefty public subsidies.of around one-third of the population.
The incoming government should look at the effectiveness and efficiency of the carrots and sticks, whether consumers and taxpayers get value for money from private health insurance, and how to address rising out-of-pocket costs.
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