MedicarePlus: more money, but missing the main debate

What system of health care financing would sustain such growth, assuming all of it leads to better health? The usual ideological arguments about public (tax-based) financing versus private insurance financing ignore the debate in other nations where consumer responsibility in health promotion and prevention is now accorded a central role in achieving affordable care.

We need a national debate on how much health care can we afford. It would flag our over-use of hospitals, identify the limits of fee-for- service payment, spotlight the growing prevalence of preventable risk factors and chronic conditions, and identify ways by which incentives and better information can enhance consumer responsibility for self-care.

If we adhere to the status quo, the Medicare levy is estimated to raise $5.4 billion in 2003/04, or about $270 per person, so the levy will finance less than a tenth of total health care expenditures.

If the ALP wants a fully funded public system with no private insurance or copayments, we would all be paying a Medicare levy of about 12 per cent of our income, which is about the average social insurance tax for health care in European nations with 15-16 per cent of their population over 65 years.

On the other hand, if we are moving toward a health system with heavier private insurance funding, public subsidies far higher than today’s $2.6 billion for the 30 per cent rebate will be required.