Health savings accounts will provide real value to consumers
In a marked turning point in the debate over the benefit of private health insurance, the Australian Dental Association (ADA) has released a major new report, Saving for Ones' Care, which provides fresh impetus for government to reexamine how health policy is delivered in Australia.
Commissioned from the Centre for International Economics, the report proposes tax incentives which would allow Australians to save for their own dental and allied health care (such as physiotherapy and optical), with the ADA calling for bipartisan support for exploring a model that is both good economic health policy and common sense.
The proposal of incentivising a health savings account recognises that the existing funding arrangement for dental care, primarily through general treatment or "extras" cover offered by private health insurers, are not providing sufficient value for consumers nor meeting the needs of many Australians.
In fact, as the ADA has long maintained and argued, many consumers with extras cover are:
· Penalised via differential rebates for seeing the dentist of their choice with health funds offering greater rebates if consumers see their contracted practitioners.
· Forced to pay high out-of-pocket costs due to gaps and exclusions in policies
· Receiving minimal annual increases in rebates for services such as dental, and
· Subject to annual limits that restrict the treatments they can access.
By using tax incentives to encourage community-wide saving for extras health care needs, Australians are rewarded for proactively managing their health in a way that overcomes the limitations of extras cover and retains their freedom of choice in the practitioner they use.
The ADA has repeatedly stated that extras cover is not real insurance; rather than acting as a product that protects against unexpected costs, extras cover provides a subsidy at best in most instances, with restrictions and caps limiting both its effectiveness and fairness.
With premiums having risen exponentially in recent years, and rebates for dental and allied care failing to keep pace, resulting in higher out-of-pocket costs, there's a compelling need to return to the drawing board and to reassess the way in which dental and allied healthcare is funded.
Click here to view the full report - Saving for Ones’ Care