Australian Politics and Policy - Senior, 2019a

Australian Politics and Policy
reverted to the pre-1974 model, relying on private insurance. Publicly funded
medical benefits were reduced, free access to public hospitals was restricted to those
meeting means tests, and an income tax rebate of 32 per cent was introduced for
people with private health insurance.
The Hawke–Keating (Labor) government, elected in 1983, reintroduced
Medibank under the name ‘Medicare’, and eliminated subsidies for private health
insurance. Private health insurance had achieved 68 per cent coverage under the
previous government’s incentives. By the time the Hawke–Keating government lost
office in 1996, coverage had fallen to 33 per cent.
The Howard (Coalition) government set about restoring a raft of incentives to
support private health insurance, many of which were designed to entice younger
people to take insurance to subsidise older members. Almost straight away
coverage rose to 45 per cent of the population and it peaked at 47 per cent in 2015
before starting to fall back. The Howard government’s reversal of Labor’s policy
was less severe than the reversal that had occurred under the Fraser government:
notably it did not apply a means test to access public hospitals, which remained
free, but there was a subtle expectation, encouraged by taxation incentives, that
thebetter-offwoulduseprivateinsurancetobuyprivatecareinprivatehospitals.
Ideologically it was a partial shift from health care as a universal service, to a service
for the needy, sometimes referred to as a ‘two-tier’ system.
The Rudd–Gillard (Labor) government, in office from 2007 to 2013,
maintained support for private insurance and the Abbott–Turnbull–Morrison
(Coalition) government essentially maintained the status quo. The election of 2016
hadseentheretentionofMedicareasamajorissue.
Labor governments are inclined to stress universalism as a principle
underpinning health care policy. That is, the idea that all should have access to
health care, regardless of means, and that clinical need rather than income or
wealth should determine allocation of scarce resources. Coalition governments
tend to stress ‘choice’, and the idea that government services should be more
directed to those in need. Some policy analysts tend to classify health care policy
as ‘social expenditure’, evaluating it in terms of equity outcomes, while others tend
to see health care in terms of correcting market failure, assessing it on economic
criteria.
The muddle
While in most high-income ‘developed’ countries there is a degree of stability in
health care financing, that is not the case in Australia. A series of policy reversals,
modifying but not redesigning existing policies, has left Australia with a patchwork
and complex set of arrangements.
Figure 3 shows one face of this complexity – the ways different health care
programs are funded. In aggregate terms Australians draw on governments, mainly
the Commonwealth, for about 70 per cent of their health care costs, private insurers
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