Health Funding

         

Reverse Mortgages as an Alternative Funding in Health Care Provision 

I see that utilisation of Reverse Mortgages can be a way of assisting funding our future national health requirements.

The provision of health services is at a critical level in the community.  As an Orthopaedic Surgeon I continue to witness a decline in the viability to provide services adequately in the public health sector.   We remain chronically under funded, rather than over budget.

As a society we are one of the wealthiest in the world, yet we are unable to adequately service our population through the Public Health System.  We need to make a decision to either accept a lower level of service in the Community or look at providing more funding into the system. 

This funding will either come from paying more taxes which can then be distributed in an inefficient system. The other option is to self-fund for procedures in health care and an increasing number of individuals are taking up this option in the passage of time.

The third option is to take out Private Health Insurance, and after a 12 month wait, have access to the Private Sector which is reactive to throughput and has the potential to expand, albeit it with issues of nursing levels across Australia. 

For some time now I have been raising the issue of how this can become available to patients.  We now have in Australia an ageing population, a large number of which own their own properties and are asset rich and cash flow poor.  Housing property values have risen dramatically, yet most individuals are unwilling to break into their nest egg.  However upon entering into aged care facilities, the home is considered an asset and is Means Tested.

I propose to my patients and to now the greater community that patients consider taking out a Reverse Mortgage and utilising the collateral of their home.  The funds available are then utilised to take out Private Health Insurance with the means to then be able to access the wider availability of services in a more appropriate time frame in 12 months time. 

I am not advocating patients taking out reverse mortgages for having surgical procedures done, as this can be a significant expense, depending on the intervention.

A $20,000 overdraft facility against a standard house, which is drawn down slowly, will not place an excessive burden on the elderly, yet it will fund approximately 10 years of Private Health cover and will accommodate a significant excess should the Health Funds determine that this high cost group will place a burden on that system.

In effect, after a 12 month waiting period there would be a significant decrease in the waiting-list across the Australian Public Health Sector which will free up beds for those patients who clearly cannot afford alternate cover.   It should also free up Respite facilities and has the potential for long term benefit.

The process of reverse mortgaging is currently voluntary. The consideration of mandatory Means Testing at age 60 or 65 may be politically unpalatatable BUT it is already done at the next stage when Aged Care accommodation is required.

Reverse mortgaging is simple and may go against the general philosophy that many people believe that the Government should be providing appropriate Health Care. However we are facing an ongoing problem of timely provision of health services to the non insured population. Reverse mortgaging is an option which has not been considered properly.

I am certainly not trying to increase my throughput in the private sector, but am merely frustrated at my inability to provide services in an equal fashion across the community. I am obviously simplifying the concept at this point, but it is a practical option for many individuals.

Individual circumstances vary and this document is not financial advice. It is a concept only.

Gary Fettke