Wednesday, July 02, 2008

The ACC deception

So Labour says National will privatise ACC - oh I wish.

ACC Minister Maryan Street made this absurd statement:

"Putting the world-respected ACC scheme up for sale will rob all New Zealanders of the security they have enjoyed in the event of accidents, wherever and however they occur, for several decades"

Hold on a minute.. "world respected"? Where in the world has the government abolished the right to sue for personal injury by accident and replaced it with a state owned insurance monopoly which pays everyone the same for any accident regardless of fault? Exactly. It was investigated and abandoned in Australia and the UK.

"the security" she talks about is illusory. ACC is fine if you are at the top of your career and an accident robs you of the ability to undertake that work. You'll get paid off as long as is necessary. However if you were, for example, a medical student and an accident destroys your ability to be a surgeon then tough - you don't get compensated for lost future earnings, but for lost current earnings. If you are a child and get crippled by a car accident, it's the same. So much for security, and never forget that the ACC state monopoly gives you no choice - you have to pay whether or not it is adequate for your needs.

Now yes ACC advocates will say you don't need a lawyer, it's fast and the risk of losing a case isn't there. However, hold on I'm not saying people shouldn't take out accident insurance. They certainly ought to choose that, and then pay according to what the insurer sees is the exposure. For example, a young person who has little driving experience and plays contact sports will pay a high premium, but a middle aged person with no claims and a clean driving record will probably be rewarded. ACC does none of this. ACC does not penalise the accident prone or reward the cautious - it charges all the same, except for employers by category. However "good" employers pay the same as "bad" employers.

Street goes on "Once National has traded away the protection the current state monopoly offers, accident compensation will become a lottery" Well hold on, how is it a lottery to pay premiums to the company of your choosing according to your own risk? Isn't it a lottery as to whether ACC is adequate for your needs or not? Why should ACC pay the criminal teenager who cripples himself in a burglary the same as the teenager who is biking safely hit by a reckless driver?

She quotes a Merrill Lynch report saying it is more expensive in other countries than NZ, yet the truth behind those figures is hard to extract. For example, what does a person get for being blinded or made quadraplegic in Australia compared to NZ? In other words, is the reason ACC is cheaper on first look because it IS the el cheapo option in terms of paying out?

It is interesting to take this point "the report found that without ACC - and under a scenario similar to that in Canada, the US and Australia – roughly 70 per cent of current ACC clients would only receive benefits through social security and the public health system, a significant erosion of the support they now get. ... individuals would be forced to take out private insurance in the event they fall off a ladder or injure themselves in a rugby game - and be left without accident compensation if they don’t.

Amazing, so the rest of us wouldn't be forced to insure ourselves against a rugby injury if we don't play the game? That's what the rest of the world offers - insurance based on your own risk. ACC socialises all risk and payments - so we all pay the same and receive in kind!

In addition:

- In other countries compensation is a single lump sum or series of lump sums, in NZ payments can continue for years and years while people are considered "unable to work". Aotearoa Legalise Cannabis Party candidate Michael Appleby has often said he is on ACC, it seemed to be the case election after election.

- In other countries not everyone who has an accident gets compensation. If you accident saw off your finger in other countries, unless you are insured for that, you wont get anything. In New Zealand you get paid. In other words, in New Zealand ACC pays you for being stupid or negligent, the rest of the world doesn't unless you pay to be insured on that basis.

It would be interesting to analyse further. Street just assumes.

She quotes a PWC report that says ACC is "best practice". Funny how nobody else adopts that. I have accident insurance now in the UK, if I was in NZ again I wouldn't rely on ACC for my own accident insurance - because I'd want a lot more than what it offers. However, Street may answer this?

Why shouldn't those who pay ACC pay less for no claims and more for risky behaviour?

Why shouldn't those who pay ACC pay more for higher levels of cover if they wish?
Meanwhile, I'm going to read this PWC report and examine what it is about - it deserves closer scrutiny to find out what questions were asked and which ones were not asked.
UPDATE: According to Stuff John Key confirms National will open up the ACC employer accounts to competition, WHICH the PWC report mentioned above says could, if properly regulated, result in improved outcomes and efficiencies. So let's be clear, Labour will oppose it, but its own report says there may be advantages in doing what National is proposing. However National wont privatise ACC, but the left somehow thinks opening the government sector up to competition is privatisation - maybe it fears no one will want to do business with the public sector if given the choice?

1 comment:

Anonymous said...

ACC has become a port of call for anyone who has a perceived injury.

For instance childbirth has well known complications. Most people make a concious decision to have a baby, or employ the services of a midwife instead of an obstetrician, or have a normal delivery no matter what. These prolonged labours, in the hands of people who have an ideological reason to keep their patients away from medical care, result in damage to the mothers such as faecal incontinence, sexual dysfunction or chronic nerve damage and get rewarded by ACC with payouts.

The fact is that these are natural consequences of choices made by the patient for which we have to pay.