private health insurance Flashcards
1
Q
what is it?
A
- Members pay premium for health-related costs not covered by Medicare.
- Optional form of health insurance.
- Can be purchased in addition to Medicare.
2
Q
definition of premium
A
the amount paid for insurance
3
Q
why do we have it?
A
- Crucial for healthcare funding.
- Provides more choice in care access.
4
Q
how is it funded?
A
- Provide one-third of hospital beds.
- Funded by private health insurance companies.
- Handle 40% of hospital separations.
5
Q
why does it cover out of hospital?
A
- Provides general treatment services not covered by Medicare.
- Provided by dentists, physiotherapists, chiropractors.
- Premium increases with each additional extra.
6
Q
how does it work?
A
- Participant pays premium.
- Premium varies based on policy coverage and options.
7
Q
what are the benefits of it?
A
- Allows private patient admission in public or private hospitals.
- Covers many expenses by insurance company.
- Covers 75% of doctor’s schedule fee for private hospital treatment.
8
Q
what does it cover in hospitals?
A
- Greater choice in hospitals and doctors.
- Higher charges compared to public hospitals.
- Patients have choice of doctor and private room.
- No longer waiting for elective surgery.
- Charges often exceed schedule fee.
- Insurance companies cover additional costs.
- Patient pays ‘the gap’.
- Partnerships with hospitals often minimize gap payments.
9
Q
‘the gap’
A
- Medicare covers 75% of schedule fee.
- Privathealth insurance covers majority of remaining fee.
- Patient may have to cover the gap.
10
Q
what are the incentives?
A
- Private health insurance proportion fluctuates over time.
- Medicare introduced, leading to fewer people opting out of private insurance.
- This strains public health system as private hospitals decrease.
- Government introduced three incentives to encourage return to private insurance: private health insurance rebate, lifetime health cover, and Medicare levy surcharge.
11
Q
incentives - private health insurance rebate
A
- income tested - determines eligibility for government assistance based on income level.
- Policyholders receive up to 30% rebate/refund on private health insurance premiums.
- Age groups eligible: 65-70, over 70.
- Policyholders can pay reduced premium or reclaim rebate in tax return.
- Increases affordability of private health insurance and generates funds for the health system.
- Increases private system usage, reducing pressure on public hospitals.
12
Q
incentives - lifetime health cover
A
- Individuals over 31 pay an extra 2% premium on private health insurance premiums.
- Maximum Lifetime Health Cover loading is 70%, applicable at age 65.
- After ten years, the loading is removed, ensuring the same premium as at age 30.
- Increased young people with insurance offset healthcare costs for older Australians.
13
Q
incentives - medicare levy surcharge
A
- Individuals earning over 90k annually pay a 1-2.5% Medicare levy surcharge if they don’t purchase private health insurance.
- Encourages high-income earners to opt for private health insurance.
14
Q
advantages of private health insurance
A
- Enables access to private hospital care.
- Allows choice of doctor in public or private hospitals.
- Shortens waiting times for elective procedures.
- Covers services like dental, chiropractic, physiotherapy, optometry, and dietetics.
- Helps control Medicare operating costs.
- Frees high-income earners from Medicare levy surcharge.
- Offers government rebates for eligible policy holders.
- Provides ‘lifetime health cover’ incentive.
15
Q
disadvantages of private health insurance
A
- High premiums required.
- Insurance may not cover entire fee, requiring individual to pay difference.
- Qualifying periods apply for certain conditions.
- Policies can be complex, creating confusion for the insured.
