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(萬思陶)
In February 2009, the National Health and Hospitals Commission released its Interim Report outlining many key reform directions. What is described as “The $94 Billion Question” is: who should run the Australian health care system?
Options proposed
The Commission proposed three options for reform:
- Option A - continued shared responsibility between governments, with clearer accountability and greater Commonwealth responsibility for some functions.
- Option B - Commonwealth to have sole responsibility for all aspects of health care, with delivery through regional health authorities.
- Option C - Commonwealth to have sole responsibility for all aspects of health care, with establishment of compulsory social insurance to fund local delivery of health services.
Option C would involve establishing a tax-funded community insurance scheme where people would choose from multiple, competing health plans. The health plans cover a mandatory set of services, including hospital, medical, pharmaceutical, allied health and aged care.
What is social insurance?
The Report explains that the Option C approach is generally called ‘social insurance’. Social insurance is distinguished from private health insurance (where people pay directly out of their own pocket to buy insurance) and public insurance (where governments use taxes to meet the costs of health services). It is a system where individuals are required to contribute a percentage of wages and all risks are pooled together. Social insurance is one of the earliest forms of universal health cover and still used in many Western European countries including France, Austria, Belgium, Germany and the Netherlands.
The Commission suggests that social insurance in Australia may have the following features:
- prudential requirements for health plans, similar to those for current private health insurers, but with health plans having responsibility for all health cover for their enrolled members
- every Australian citizen and permanent resident required to be enrolled in a health plan of their choice
- health plans would have no right to refuse an individual as a member or be permitted to discriminate on the basis of location, and
- health plans or third party insurers would be permitted to offer separate additional tables of cover for an additional premium, however they would not be able to use any additional premium revenue to top up the government allocation for mandatory service delivery.
The scheme would be funded through taxation by a ‘health levy’ (approximately 14 per cent of taxable income). The levy would not be an ‘extra’ tax, rather it would simply involve directing the component of taxation that already goes to health care to a social insurance fund. Funds would be allocated to health plans based on a “risk adjusted” membership profile of each plan, that is, reflecting past use of health services and other factors such as age, sex, location and health status.
How will social insurance and private health insurance fit together?
The Commission has indicated that careful consideration of how a social insurance scheme would fit with private health insurance is needed. One suggestion is that private health insurance would continue as it does in the current system, providing cover for services and levels of amenities not included in social insurance.
Viewpoints expressed in submissions
Several submissions made by private health insurance participants are in favour of Option A in the short term and possibly Option C over the long term. There is little support for Option B.
Option A is favoured because it is incremental and does not involve a major departure from the current systems and structure. There are divergent views on the appropriateness of the Commonwealth assuming all responsibility for all aspects of health care.
One submission contends that implementing Option C will lead to consolidation of the private health insurance industry. Others express various degrees of support for Option C but would require significantly more detail and consultation to make a proper assessment. The recent reform to health funding in the Netherlands is given as an example of a successful implementation of full health insurance coverage for the population.
Final report due June 2009
The Commission is expected to submit its final report to the Government in June 2009. It remains to be seen whether social insurance will form part of the landscape of health care in Australia.