Patriotism is not something that comes naturally in these globalised times, but Australia’s universal publicly funded health insurance system is something we don’t need to feel shy about on the world stage.

At around 9 per cent of GDP, Australia spends half of the almost 18 per cent now being spent in the inefficient market-based United States system. We spend less than the OECD average, yet our health statistics like life expectancy and infant mortality are generally well above average, notwithstanding some shocking inequalities.

Clearly there are many problems, including waste, inefficiency and inequity, and the National Health and Hospitals Reform Commission has rightly identified some well thought-through proposals for a more efficient integrated twenty-first century system.

Yet along with the laudable plans to reform a basically robust system, is the proposal that could undermine our system’s very fundamentals: Medicare Select.

In chapter six the commission appears to advocate the creation of new private insurance plans that would somehow operate within Medicare, and allow people to in some way opt out of the government operated plan.

The writing in the report at this point it not at all clear, but its uncertain whether the lack of clarity in the report is because the idea has been ill-thought through, or whether there is a deliberate attempt to obfuscate.

On page 15 of chapter 6 the report states that “all Australians would automatically belong to a government operated health and hospital plan, which could be a national plan, a plan operated by a state government or by a not-for-profit or for-profit organisation.” The obvious question is how can everyone belong to a “government operated” plan that at the same time may be a plan “operated” by a for-profit organization?

The reports next line states that under the proposed Medicare Select model, people could “readily select” to move between government plans or to a plan “operated by a not-for-profit or private enterprise.”

Opening up this ability to opt out of the government’s publicly run insurance plan and opt in to a private plan, could well spell the beginning of the end of Australia’s universal publicly funded system. You can’t be a little bit pregnant. The fundamental nature of a public universal insurance scheme is that the insurance is public and universal.

An opt out clause means the healthy and wealthy can join a private insurance industry that ultimately offers something resembling an alternative system to the public insurance scheme, fundamentally undercutting the universal solidarity which is the key to Medicare: we are all in this together.

It’s exactly the sort of expanded role that many in the private health insurance wanted during the Howard years, but despite all the billions of dollars in support that it won from the government, it never managed to convince the Coalition cabinet to allow Australians to “opt out” of the public scheme.

If the Rudd Cabinet is considering such a backwards step, perhaps they should make that clear as soon as possible, so a genuine debate can follow.

One need look no further than the United States to see that expanding the private insurance sector and losing the solidarity of a universal publicly run health insurance, will exacerbate rather than solve the existing problems of waste, inefficiency and inequity.

And funnily enough, there’s already been an insurance scheme called Medicare Select- in the United States.

Ray Moynihan recently co-authored a report on global health policy developments, here.