The Senate has learned that private health insurance has pushed up premiums by as much as 1400 yuan a year because it creates an insurance product that does not include medical services such as childbirth.
While consumers think they can save money by agreeing to get rid of certain insurance programs, they end up paying more.
The reason is that popular products that do not include childbirth services are more likely to attract older people over childbearing age.
Older people are more likely to go to medical care, so private health insurance has to charge higher premiums because they are more at risk.
That pushed up premiums for these products by 25-30%-an extra $1400 for a family and $700 for a single person.
Schneider (Russell Schneider), a former head of the health insurance company and a member of the board of lobbyists and non-profit healthcare funds, said the products, which exclude a wide range of programs, focus high-risk people on certain products and drive up costs.
In a Senate inquiry into government's health reform, he said the government's simplification of private health care products to gold, silver, copper and basic four levels next year would make the problem more deeply entrenched. And make it impossible for most Australians to afford top-of-the-line insurance.
"the most absurd example is to encourage older couples to buy products that do not include obstetric services: in this way, they will be attracted to products that include more older people and who do not have young members to compensate for the risk," he said. Their costs will unnecessarily inflate. " He said。
The situation has become so bad that now it is "not healthy people who are subsidizing patients, but patients who are subsidizing healthy people!"
Walker (Brent Walker), a health insurance actuary, agreed that products that excluded many projects were pushing up top insurance charges, with an estimated impact of 25 to 30 percent.
But he said the claim ignores the fact that it is important to exclude cheaper products from many services because they attract young people to insure.
But Schneider said that would deprive private health care of its value, and that many policy-holders' products did not meet the services they needed and had led many policy-holders to rely on the public hospital system.
His solution is to drastically simplify the system, allowing the Medicare Fund to provide only one product that covers all the medical services that are currently included in top-of-the-line hospital products.
He said this would reduce the cost of top hospital insurance and additional insurance from 4700 yuan to about 2800 yuan for the current family and 1300 yuan for individuals.
Schneider also attacked government's offer of up to 10 percent discount to 18-29-year-olds, saying it would save 38 cents to $2 a week. Unless it attracts an extra one hundred thousand young people, premiums for others will rise to make up for the discount.
He said the government's subsidy for health insurance should be raised from 25 percent to 30 percent, and the tax penalty for people without health insurance should be raised from 1.5 percent to 2 percent.