private health insurance Flashcards
what is private health insurance
type of insurance where members pay a premium (fee) to receive payment towards health-related costs that are not covered by medicare
private health insurance incentives
- private health insurance rebate
- lifetime health cover
- medicare levy surcharge
- age based discount
private health insurance rebate
eligible policy holders can opt to pay a reduced premium (with the government contributing the remainder) or pay the total and reclaim the rebate in their tax return
(targets low and middle income earners)
lifetime health cover
people who take out private health insurance after the age of 31 have to pay an extra 2% on their premiums for every year they’re over 30. (40 year old = extra 20%)
(targets young people)
medicare levy surcharge
individuals earning more than $90,000 (180,000 for families) per year pay 1-1.5% extra tax if they do not have private health insurance which encourages individuals to take out PHI to avoid this extra tax
(targets high income earners)
private health insurance strengths
- access to private hospital care
- choice of doctor in public or private hospital
- shorter waiting times for medical procedures such as elective surgery
private health insurance disadvantages
- costly premiums (sometimes have to pay gap payments)
- policies can be difficult to understand which creates confusion
- qualifying periods apply for some conditions like pregnancy
how does private health contribute to the australian healthcare system
As well as giving individuals more choice with their healthcare, private health insurance also helps to reduce the burden on the public health system
it also contributes to necessary funding of Australia’s health system, which gives individuals more choice in the sort of healthcare they wish to access
age based discount
insurers can offer 18–29 year olds up to 10% discount for hospital cover
allows for a 2% reduction in premiums for each year the person is under 30, to a maximum of 10%
