Scrap Medicare and make private health insurance compulsory, NIB boss says

The head of private health insurer NIB is calling for Medicare to be ditched and for all Australian’s to be forced onto compulsory private coverage. Source: Getty

Mark Fitzgibbon, the head of private health insurer NIB and one of Australia’s biggest insurance bosses is calling for Medicare to be ditched and for all Australian’s to be forced onto compulsory private coverage.

Writing an opinion piece for the Australian Financial Review, Fitzgibbon said Australia should follow in America’s footsteps and adopt a similar healthcare model – which he said would benefit the most vulnerable and allow the private sector to flourish without competition from Medicare.

“[A] sensible policy approach would be to make private health insurance compulsory for all Australians with taxation devoted to subsidising the premiums for those who would otherwise be left behind,” Fitzgibbon wrote. “That is, high-income earners would at one end of the scale pay the entire premium while at the other, those with low income fully subsidised.”

His controversial suggestion follows the release of last week’s Grattan Institute report, which found younger people are abandoning the private market in droves.

Of course, private health insurance isn’t something all Baby Boomers can afford either. On April 1, private health insurance premiums rose by an average of 3.25 per cent around the country. Average premiums have increased by 26 per cent in the past five years and in most cases, incomes have not increased to match this.

The ageing population is one of the reasons behind the increase and there are less young people to balance it out, while improvements in medical technology mean that the latest and best treatments are being used to treat serious health issues.

Most people on a singles policy now pay an additional $62 a year under the changes, while couples policies increased by an average of $151 annually. Fitzgibbon spoke further about his idea on 2GB with Steve Price on Tuesday.

“Medicare is just a word to describe what is a government-operated monopoly, social insurance scheme that’s compulsory,” he said. “So it’s not too radical the idea that we should have compulsory insurance, it’s just a question should it be a government-run monopoly or should it be a competitive market where consumers get a choice.

He said the current healthcare system means a person with private health insurance waits around 50 days for a knee replacement, but those without can wait up to 300 days. Both the Federal Government and Labor have rejected the idea, according to the Australian Financial Review, with both parties confirming they are committed to taxpayer-funded universal healthcare.

Still, the idea has still sparked debate across Australia. Radio presenters Alan Jones and Justin Smith appeared on Wednesday’s episode of Sunrise to discuss the topic.

“As we stand, people think Medicare pays the health bills and it doesn’t even pay the bills for the National Disability Insurance Scheme,” Jones explained. “Medicare bill raises only about $18 billion dollars and the NDIS will cost more than that.”

He said Medicare can’t be scrapped because there are people who can’t afford private health insurance, but those who can afford it should have it to reduce pressure on the public system.

“It is a mess, but the answer is not scrapping Medicare,” he added.

Smith described Fitzgibbon’s idea as a “joke”.

“He wants to pour more money into the insurance, why don’t we pour more money into Medicare?” he asked. “Why is it up to every Australian to try and save the insurance industry from this ‘death spiral’? Why are we out to save his job?”

Do you think Medicare needs to be scrapped? Do you have private health insurance?

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