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Private health care warrants Govt recognition

Tuesday, October 12th, 2004

Private health care warrants Government recognition

The falling affordability of health care and health insurance is increasing the pressure on the public health system, and will soon impact on Government's longer term growth plans, the Employers & Manufacturers Association (Northern) says.

EMA's comments were a response to the report released today by Southern Cross Healthcare recommending the value of health insurance be recognised with a 30 per cent rebate.

Many employers recognise health insurance is good for their staff and business, and are concerned about the declining numbers covered by it.

Just 33 per cent of New Zealanders pay for health insurance compared to 43 per cent of Australians, who benefit from a 30 per cent Government rebate.

"The reasons for introducing some form of tax rebate, or direct financial contribution from Government, to increase the number of people buying health insurance makes sound economic sense," said Alasdair Thompson, EMA's chief executive.

"Health care inflation in New Zealand is spiralling upwards as it is in the US where costs are rising from 11 to 15 per cent a year.

"Projections for health care show it will absorb an ever larger part of total GDP. It's increased by a third, from 15 to 20 per cent of GDP in the past decade.

"One answer is for Government to leverage off the private sector's health insurance and hospital infrastructure by encouraging more people to buy a greater proportion of their own health care.

"Imagine if those people with private health insurance found they could no longer afford it and went to the public health system for care. Either waiting lists would extend dramatically, or government's surplus would be dissipated dealing with them.

"This is an area where Government could save a huge amount of money, and relieve hospital waiting lists, by copying Australia's approach.

"Everybody stands to gain, and it would at least buy time while we developed sustainable health care services."


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