Private health insurance Flashcards
What is private health insurance
Private health isnsurance is an optional additional health insurance which provides people with coverage for health services not covered by medicare. Private health insurance requires consumers to pay a fee, also known as an insurance premium.
Aim of PHI
Private health insurance is an important component of the Australian health system as it assists in taking the pressure off Medicare and the public system.
What is covered by PHI
The basic policy covers the cost of admission to a public or private hospital.
Often the private hospitals charge well above schedule fee and the health insurance companies did not meet the full cost. The patient has to pay the gap
PHI extras cover provides cover for services such as:
- Physiotherapy
- Dentist
- Chiropractor
Private health insurance incentive schemes
- Private health insurance rebate
- Medicare levy surcharge
- Lifetime Health insurance cover
Private health insurance rebate
A rebate (or refund) on part of the cost of the insurance premium paid by the federal government. Means that the more you earn the lower the rebate. (0-26%)
Medicare Levy surcharge
An additional 1-1.5% of taxable income for high income earners who do not have private health insurance (hospital cover).
Lifetime health insurance cover
People who take up private health insurance after the age of 30 pay an extra 2% on their premiums for every year after they are over 30.
Advantages of PHI
- Allows patients to choose their doctor in hospital
- Allows choice of hospital
- Can reduce the waiting times for non-emergency treatments
Disadvantages of PHI
- Premiums can be costly
- Depending on type of cover, service claimed and treating doctor, there may still be out-of-pocket cost
- Waiting periods may apply for some services
PHI in promoting health
People with private health insurance have a wider range of health services subsidised then those covered by Medicare and are less likely to delay treatment leading to better health outcomes. Private health insurance can support health care system through funding elective surgeries in private hospitals resulting in shorter waiting times in the public hospital system.
Sustainability of PHI
- PHI is economically sustainable as it helps to meet the health care needs of the current generation as it leads to less burden on the health care system.
- It also meets the needs of future generations with the implementation of the incentive scheme to make PHI more fordable and therefore decreasing the demands on the public health care system.
Access of PHI
- Private health insurance enables people to have a greater access to healthcare services that are not covered by Medicare. These are often deemed ‘extras’ and depending on the persons policy they may be covered for services such as dental, chiropractic, physiotherapy and alternative therapies. Waiting times for elective surgeries are also shorter if existing at all for private patients.
Equity of PHI
- PHI promote equity through the PHI incentives. Lower income earners with PHI receive a greater rebate on their health insurance premiums compare to high income earners. The Medicare levy surcharge only applies to high income earners that don’t have PHII and does not penalize those who cannot afford PHI.
