Station: 4BC Date: 22/08/2011
Program: Drive Time: 04:23 PM
Compere: Gary Hardgrave Summary ID: W00045123762
Item: Michael Armitage, the Chief Executive of the Australian Health Insurance Association, says a report has shown that the Federal Government’s new plan to wipe out part of the subsidy for private health insurance will increase the average waiting time in the public sector from 65 days to 259 days. He argues that by paying for private health insurance, he creates shorter queues in the public health system for those who can’t afford to go private.

Interviewees: Michael Armitage, Chief Executive, Australian Health Insurance Association

GARY HARDGRAVE: The story of a 46 year old woman – her husband has written in to us, Steve. And the way it’s been explained to us is this; she has the need for an operation – a blocked valve in her leg, her ankle swells up, blood’s not circulating. She has no private health – she just has Medicare.

                                      The doctor wrote to Queensland Health. The doctor told – was told by Queensland Health that under the public system she won’t get the operation – the waiting period was far too long.

                                      She was suggested – it was suggested at the age of 46, not in her lifetime would she be able able to get a private – sorry, a public hospital operation. Not in her lifetime at the age of 46. But if she was covered by private health, the operation would be done inside 12 months. She’s waiting to see a specialist – it’ll take another six to eight weeks.

                                      Now I’m a private health subscriber, and I for one would be a bit angry if somebody with a precondition actually ends up getting this subscription and then my private health contributions meet the cost.

                                      Sorry Steve, who’s a listener, and his wife. But there is something wrong here. And that is the public system’s obviously not coping. And meanwhile in Canberra they’re trying to wipe out part of the subsidy that causes many of us to take out private health insurance at a cheaper cost.

                                      Dr Michael Armitage is the chief executive of the Australian Health Insurance Association, and Michael, I guess, if we don’t have private health insurance, we are in a long queue in the public system.

MICHAEL ARMITAGE:  Hi Gary. That’s absolutely right. We commissioned an independent report which was done in – early this year in February and March. And the results of that show that if this legislation goes through, the average waiting time – which at present is 65 days – and many people would say that’s too long already – the average waiting time will go up to 259 days. So that’s in the public sector.

                                      The reason for that is a lot of people drop out of private health insurance because the costs go up due to the legislation. And then when they need an operation they’re not covered for the private sector. So they then compete with people who are already on the public list.

GARY HARDGRAVE: Well I mean my – I take top co…

MICHAEL ARMITAGE:  [Indistinct]like a really bad health decision.

GARY HARDGRAVE: Well I take top cover. It’s costing me $100 a week – $5200 a year. Thirty cents in every dollar is subsidised out of the government rebate scheme. That’s $1655 – there you go, I’ve disclosed my business to the world.


GARY HARDGRAVE: But Michael, it is my responsibility, I think, to offer shorter cues at the public system for those who can’t afford private health insurance.

MICHAEL ARMITAGE:  Garry, it’s a really interesting thing you say. We’ve done a lot of surveys as you would expect an industry to do. And whilst it is important that people want easier access and choice of doctor and so on themselves, one of the sort of sleeper issues is that many people identify exactly what you’ve said.


GARY HARDGRAVE: They say, by making a contribution to the private sector – even though a lot of them are under pressure financially to do it, they feel it’s part of their, sort of, social contribution if you like – that they are actually keeping the hospital waiting list in the public sector lower for those people who can’t afford private health insurance.

GARY HARDGRAVE: But the story we’ve given you here is Steve’s wife. She’s age 46 – she needs an operation. She’s been told the public system won’t accommodate her in the foreseeable future. Privately, they reckon not in her lifetime. Whether that’s an exaggeration or not either [break in transmission] after 12 months, or a year or two of private health insurance membership to get that operation?

MICHAEL ARMITAGE:  Look, there are very strict, what are called pre-existing ailment rules. And that is to avoid what’s called gaining of the system. We feel that – or no, not we feel – the general insurance issue is that if people knew – well in Queensland, if people knew there was going to be a flood every 10th year, they would only insurer in years nine and 10.


MICHAEL ARMITAGE:  And so that’s not fair for the people who maintain the insurance pool in all the other years. But…

GARY HARDGRAVE: [Interrupts] But does she end up in a private hospital somewhere down the track if she takes out private health insurance?

MICHAEL ARMITAGE:  Look, it would depend on the particular fund…


MICHAEL ARMITAGE:  …but it would be unlikely. If it was a pre-existing ailment I think she would, you know – it would depend on what fund she was looking at. But I think the answer’s no. And…

GARY HARDGRAVE: And of course that then means she’s up  to the public system – it’s up to the public system to help her then.

MICHAEL ARMITAGE:  Well the bottom line is that if people have a pre-existing ailment – and there are often time limits where pre-existing ailments – so that people join and contribute for period of time before they become eligible for the particular care, or the care for that particular ailment – so that gets over it in some way.

                                      But the bottom line is that if people are going to, as I said, gain the system, it becomes unworkable for everybody.

GARY HARDGRAVE: Of course it does.


MICHAEL ARMITAGE:  And the dilemma is that so many people get illnesses which they don’t predict.

GARY HARDGRAVE: Of course not. Either way Michael, it’s a fascinating discussion. We’ll keep an eye on what’s happening in Canberra. Appreciate your time today.

                                      Dr Michael Armitage from the private health insurance sector. And the stupid decision in government to try and wipe out this rebate. Unbelievable.

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Transcript produced by Media Monitors