Healthcare lessons from Australia: what can Michael Howard learn from
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《英国医生杂志》
1 Centre for Health Economics Research and Evaluation, University of Technology, Sydney, Australia, 2 Department of Health Sciences, University of York, York YO10 5DD
Correspondence to: A Maynard akm3@york.ac.uk
Australia is held up as a model of how to increase use of private health care in the United Kingdom, but the effects of its reforms are not all beneficial
Introduction
The first element of the Howard reform in 1997 was an income related subsidy, together with penalties for higher income earners without insurance.5 The maximum rebate on the premium was $100 (￡40, US$78, 58) for a single person (for hospital only cover) and $450 for a family (for both hospital and ancillary services cover), phasing out at taxable income thresholds of $35 000 for a single person and $70 000 for a couple plus $3000 for each child. At the other end of the income scale, people without private health insurance had to pay an income tax surcharge. Single people earning more than $50 000 and couples earning over $100 000 (plus $1500 for each dependent child after the first) were subjected to a tax surcharge of 1% of their income. The reform had little effect on the downward trend of insurance purchase.5 6 This is not surprising as it targeted the extreme ends of the income distribution. Most high income earners already had insurance and insurance remained relatively expensive for the lowest income groups.
Should Michael Howard (left) be singing from John Howard's songsheet?
Credit: PA/EMPICS
Credit: BAGUS INDAHONO/EPA/PA/EMPICS
In 1999, means testing was removed and anyone purchasing insurance was offered a 30% rebate through a reduced purchase price or as a tax rebate.5 6 The tax surcharge was retained. At this time, the fall in insurance coverage seemed to have been stopped. The change meant that for many high income earners, the cost of insurance was less than the Medicare surcharge so they were better off buying insurance.
This was quickly followed by the third element of the Howard reforms, lifetime health cover, introduced in mid-2000. People who purchase health insurance pay a premium related to their age at the time. People joining up to the age of 30 years pay the base rate for the rest of their lifetime; older people pay the base rate plus a 2% premium for each year past 30. The age premium breached strict community rating but is asserted to be lifetime community rating; individuals are not discriminated by risk but by the age at which they first purchase insurance.5 6 The rationale behind this policy was that insurance funds suffered adverse selection on age; younger, healthier people relied on the public system while the older, higher service users held on to their private insurance.
A strong government advertising campaign accompanied the policy change. The advocacy associated with this policy was so effective that insurance fund switchboards were jammed, and the deadline for purchasing insurance had to be extended. This element of the Howard reforms drove coverage up to 45%, although the most recent data show it has fallen to 42%.2
However, many of the insurance packages require high lump sum initial payments whenever care is consumed. This means that insured individuals face high personal costs and a clear incentive to be admitted as public patients rather than claim on their private insurance. Even without the high front-end payments, many policyholders faced unknown and potentially high copayments. Subsequent changes have encouraged no gap and known gap policies to overcome this.7
The rising level of copayments was tackled by another initiative, the Medicare safety net, introduced in March 2004.8 This bypasses private insurance to provide 80% reimbursement of all fees charged on out of hospital medical services once a threshold of $700 a family ($300 for lower income families) is reached. It is, in effect, an open ended insurance arrangement, paid for by government, to cover what doctors charge without any constraint on payments, such as limiting them to agreed or scheduled fees. In the recent election campaign, further commitments were made to raise the private insurance rebate to 35% for the 65-75 age group and 40% for the over 75s.(Jane Hall, professor of health economics)
Correspondence to: A Maynard akm3@york.ac.uk
Australia is held up as a model of how to increase use of private health care in the United Kingdom, but the effects of its reforms are not all beneficial
Introduction
The first element of the Howard reform in 1997 was an income related subsidy, together with penalties for higher income earners without insurance.5 The maximum rebate on the premium was $100 (￡40, US$78, 58) for a single person (for hospital only cover) and $450 for a family (for both hospital and ancillary services cover), phasing out at taxable income thresholds of $35 000 for a single person and $70 000 for a couple plus $3000 for each child. At the other end of the income scale, people without private health insurance had to pay an income tax surcharge. Single people earning more than $50 000 and couples earning over $100 000 (plus $1500 for each dependent child after the first) were subjected to a tax surcharge of 1% of their income. The reform had little effect on the downward trend of insurance purchase.5 6 This is not surprising as it targeted the extreme ends of the income distribution. Most high income earners already had insurance and insurance remained relatively expensive for the lowest income groups.
Should Michael Howard (left) be singing from John Howard's songsheet?
Credit: PA/EMPICS
Credit: BAGUS INDAHONO/EPA/PA/EMPICS
In 1999, means testing was removed and anyone purchasing insurance was offered a 30% rebate through a reduced purchase price or as a tax rebate.5 6 The tax surcharge was retained. At this time, the fall in insurance coverage seemed to have been stopped. The change meant that for many high income earners, the cost of insurance was less than the Medicare surcharge so they were better off buying insurance.
This was quickly followed by the third element of the Howard reforms, lifetime health cover, introduced in mid-2000. People who purchase health insurance pay a premium related to their age at the time. People joining up to the age of 30 years pay the base rate for the rest of their lifetime; older people pay the base rate plus a 2% premium for each year past 30. The age premium breached strict community rating but is asserted to be lifetime community rating; individuals are not discriminated by risk but by the age at which they first purchase insurance.5 6 The rationale behind this policy was that insurance funds suffered adverse selection on age; younger, healthier people relied on the public system while the older, higher service users held on to their private insurance.
A strong government advertising campaign accompanied the policy change. The advocacy associated with this policy was so effective that insurance fund switchboards were jammed, and the deadline for purchasing insurance had to be extended. This element of the Howard reforms drove coverage up to 45%, although the most recent data show it has fallen to 42%.2
However, many of the insurance packages require high lump sum initial payments whenever care is consumed. This means that insured individuals face high personal costs and a clear incentive to be admitted as public patients rather than claim on their private insurance. Even without the high front-end payments, many policyholders faced unknown and potentially high copayments. Subsequent changes have encouraged no gap and known gap policies to overcome this.7
The rising level of copayments was tackled by another initiative, the Medicare safety net, introduced in March 2004.8 This bypasses private insurance to provide 80% reimbursement of all fees charged on out of hospital medical services once a threshold of $700 a family ($300 for lower income families) is reached. It is, in effect, an open ended insurance arrangement, paid for by government, to cover what doctors charge without any constraint on payments, such as limiting them to agreed or scheduled fees. In the recent election campaign, further commitments were made to raise the private insurance rebate to 35% for the 65-75 age group and 40% for the over 75s.(Jane Hall, professor of health economics)