Back on Blogocracy we had a couple of discussions about the increase to the medicare levy surcharge. When the policy was first announced Tim posted this thread.
The medical insurance industry was saying that it would lead to the membership dropping below the 40 per cent threshold. And some posters were declaring how this was a disasterous policy.
Sherlock: This will result in a flood of people returning to the public system.
Carlyle: am no fan of insurance companies of any kind, however I believe the changes are ill conceived & before rushing to change the status quo the new Government needs to tread a little more warily.
Tim then made a followup post the next day where he links to an interview with Prof John Deeble who commented on the medical insurance industries comment that membership will drop:
JOHN DEEBLE: Yeah, well they would say that, wouldn’t they? But I don’t think there is any level of viability as such. Look, I was a director of Medibank Private for 17 years so I know something about this. Private health insurance is not particularly price sensitive. People who buy it, buy it because they want that extra cover or they believe in that particular method of getting their health services. Price doesn’t matter a great deal. The switch that people are talking about cannot be predicted.
The bill stalled in the senate and only passed when a compromise was made where the threshold was only increased by a smaller amount.
And so we move on nearly twelve months and what do we find? Yesterday the following story appeared in The Australian:
PRIVATE health funds have recorded their highest membership rates in seven years, defying warnings that controversial changes to the Medicare levy surcharge would cripple the industry.
In fact, the percentage of take up has increased.
So it seems that Labor and Treasury were right and the coalition, the doctors union (boo!) and the medical insurance industry was wrong.
Funny old world, eh?
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