Medicare

Medicare is the primary source of health cover in Australia. Funded and managed by the government through Medicare Australia, it covers citizens and most permanent residents (except the poor residents of Norfolk Island).

Medicare covers 100% of the costs incurred if you enter a public hospital as a public patient. However, you generally cannot choose your doctor (one is assigned to you by the hospital for each stay) or your admission time. If you see a doctor outside of the hospital setting, Medicare will pay for 100% of the consultation for a general practitioner and 85% of the fee for a specialist. If you choose to be admitted to a hospital as a private patient, Medicare will pay for 75% of the fee, according to their set fee schedule. Medicare also pays for a percentage of any medications you may be prescribed as well under something called the PBS – Pharmaceutical Benefits Scheme.

Medicare is funded by a 1.5% Medicare levy on salaries as well as a 1.0% penalty levy on higher income earners who have not taken out private insurance. The bulk of the money comes from the government’s general fund, as the levies aren’t nearly enough to fund the cost of the Medicare system.

As with any insurance cover Medicare has a list of exclusions, such as optical or vision care. Visit the Medicare site to find out more about the program.

Private Hospital Cover

Like the name implies, this cover kicks in when you choose to be admitted as a private patient in either a public or private hospital. The big benefit to this is that you get to choose your doctor and hospital, and wait times are generally much shorter in private settings.

Private hospital cover kicks in after Medicare pays its part, which is usually 75% of the bill. Some policies will provide ambulance cover as well, since Medicare does not cover any costs related to transport by ambulance. Residents of Tasmania and Queensland have ambulance transport provided by the state government, so if you live there skipping this cover is probably a good idea.

There are plenty of different private plans to choose from, and the cost will vary according to a number of factors, including the following.

• Excess – Plans that require you to pay part of the bill before the plan does will lower your premium. The higher the excess, the lower the premium will be. Be aware that a hospital stay that is less than the amount of excess required by your plan will have to be paid directly by you.
• Co-payment – Some plans will require you to make a co-payment at the time you receive services eligible to be covered by the plan. This could be on a per day basis for hospital stays or on a per case basis. Co-payments will sometimes have a yearly cap on them and once you accumulate that much in payments, you won’t need to make co-payments for the rest of the year.
• Exclusions – Many plans will exclude or restrict certain types of illnesses and treatments. By accepting a plan with exclusions, you should expect to play less in monthly premiums.
• Hospital Substitutes – Some plans will cover alternative methods of treating and managing ailments that would normally occur in a hospital but happen in smaller, specialized treatment centres instead.

In an effort to relieve some of the burden from the Medicare plan, the government currently pays a 30% rebate for the cost of private health cover premiums as well as a charge a penalty to high income families and individuals who do not opt to take out private health cover.

While the array of funds and premiums can be confusing, the Private Health Insurance Ombudsman and the government’s Private Health initiative site are great places to do your research as these sites, especially the latter, contain encyclopedic listings and details from every health fund and policy on offer.

Private General Treatment Cover

This other type of private cover is available to help pay for treatment not covered by Medicare, such as optical and dental treatment as well as speech and physiotherapy treatments. Many people opt to purchase this type of private cover and rely on Medicare and public hospitals for any major illness or injury.

Many plans package general treatment cover, also known as ancillary cover, with hospital cover to create a comprehensive private health plan to supplement your Medicare cover.

Lifetime Health Cover

Technically not a type of health cover, the lifetime cover program has been enacted by the government to encourage citizens to take out private cover when they are young and to maintain throughout their life. The program does this by raising premiums for first time insurance buyers proportionate to their age.

You have until the July 1^st after your 31^st birthday to take out private hospital cover without having to pay any sort of premium loading. For every year you wait after that there will be a 2% loading added to the premium, up to a maximum of 70%.

There are some caveats and conditions to determine your loading if you are beyond the age of 31 and don’t have private hospital cover yet. The government created a calculator that will consider any exemptions you might have and determine your loading percentage if you were to take out insurance between now and your next birthday.

In Conclusion

The long waiting periods and lack of choice in the Medicare program, as well as the lack of cover for certain things, make having private health cover a prudent decision for anyone that can afford it. Having private cover provides you with more choices. If you choose to use Medicare and go to a public hospital, then it is a choice you made that best fits your situation. But if you feel as though you need to use your private cover and choose your doctor and hospital, then you will have that option as well.

The best physician-patient relationships are based on trust and built up over the course of time. Your health shouldn’t have to wait for an opening at a crowded public hospital. You should be able to determine, with your physician, the best time for you to have any procedure performed. Think about it, do you really want to have a health issue that requires hospitalization and never have even met the doctor who will be treating you?

Photo by mr nightshade