The Actuaries Institute released this Green Paper which shows that due to Australia’s ageing population and other factors, the Government must take policy action if Australia is to prepare effectively for rising future health care costs.
Commissioned by the Institute and undertaken by Three Rivers Consulting, the report found that, with Government spending on health care expected to grow from 6.5% to 10.8% of GDP over the next 50 years, the funding requirement on the working population will grow considerably. Increasing health costs are not just linked to the ageing population: factors such as rising obesity and expensive technology associated with health care are major contributors.
Issues discussed in the paper include:
- Green Paper shows the health care funding cost on the working population will increase as Australia’s population ages.
- Health care costs are rising dramatically with age – health expenditure for an 85 year old Australian is more than four times that for a 50 year old. By 2049-50 the number of Australians over 85 will more than triple and there will be seven people aged 85 and over for every 100 working age people, compared to just three now.
- Without “future proofing” Australia’s health care system, the working population may be paying almost double their own health expenditure to pay for older Australians. With limited capacity to pre-fund health care costs, and a recognition that almost half of household wealth is projected to be in the hands of the over 65s by 2030, the paper asks whether it is equitable to ask older Australian to contribute more to help fund future health care costs.
This Green Paper was commissioned by the Actuaries Institute and prepared by Kirsten Armstrong and Sophie Dyson, Directors, Three Rivers Consulting.