Medicare

What makes up a health system?

Funding models, a professional and well-trained workforce, reliable information on which to base decisions and policies, up-to-date facilities, and logistics to deliver quality medicines and technologies.

What are the two components of Australia’s health system?

Public and private healthcare

What does the public component to healthcare involve?

-public-sector health services and schemes that are provided by the Australian, state/territory and local governments.

(e.g. Medicare, Public hospitals, PBS, NDIS)

What doe the private sector include

Private health insurance, private hospitals and medical practitioners in private practices.

Define Medicare

-Australian’s universal health insurance scheme established in 1984 and administered by the federal government, Medicare gives all Australian permanent residents and people from countries with a reciprocal agreement such as New Zealand and the United Kingdom access to subsidised healthcare.

What does Medicare cover?

-Doctor (GP) and specialist consultations

-Most surgical operations/therapeutical procedures performed by GPs

-X-rays

-Eye tests (performed by optometrists)

-Pathology such as blood and urine tests

-Fee-free treatment and accomodation in public hospitals

-Dental services for some children under the Child Dental Benefits Scheme

-75% of the schedule fee for treatment in a private hospital.

Define schedule fee

The amount of money that the government deems appropriate for a particular medical service or procedure.

Define patient co-payments

The payment made by the consumer for health products or services in addition to the amount paid by the government

Bulk-billing

When the doctor charges only the schedule fee- the payment is claimed directly from Medicare so there are no out-of pocket expenses for the patient.

What else does Medicare cover?

-85% of schedule fees for specialist services such as those performed by dermatologists (skin), cardiologists (heart), and obstetricians (pregnancy and childbirth).

-Fee can only be 100% covered if the patient has private health insurance

Describe the medicare safety net

Provides extra financial assistance for those that incur significant out-of-pocket costs for Medicare services

-Once an individual or family has contribubted certain amount out of their own pocket to Medicare services in a calendar year ($560.40 in 2024), further fianncial support is provided by the government, making Medicare services cheaper for the remainder of the year.

-This removes financial barriers and thus provides access to healthcare for those with low income.

What doesn’t medicare cover?

• Cosmetic or unnecessary procedures

• Private hospital costs (only 75% of schedule fee covered; no accommodation/extra costs)

• Most dental services (except eligible children 2–17)

• In-home nursing care

• Ambulance services

• Alternative therapies (e.g. chiropractic, acupuncture, massage) unless GP-referred

• Health aids (glasses, contacts, hearing aids, prostheses)

• Pharmaceuticals

• Medical costs covered by a third party (e.g. employer, insurer)

• Most allied health services unless GP-referred or in a public hospital

Allied health services: Care from non-doctor professionals (e.g. physiotherapists, psychologists, occupational therapists)

Strengths of medicare

-Available for all Australian citizens

-Choice of doctor for out-of-hospital services

-Reciprocal agreement between Australia and other countries allows Australian citizens to access free healthcare in other countries.

Weaknesses of Medicare

-No choice of doctor for in-hospital treatments

-Waiting lists for many treatments

-Does not cover alternative therapies

-OFten does not cover the full amount of a doctor’s visit.

What are the trhee ways Medicare is funded

-The Medicare levy

-The Medicare levy surcharge

-General taxation

Define the medicare levy

An additional 2% tax placed on the taxable income of most taxpayers. Those with low incomes/specific circumstances may be exempt from paying the levy.

Define the Medicare levy surcharge

An extra tax people without private insurance earning more than a certain amount ($97 000 a year for indivduals and $194 000 for families in 2023-24) have to pay.

-The Medicare Levy surcharge increases as income increases; for example, an idnviidual earning more than $97 000 will pay an extra 1% of their income to Medicare, and an individual without private health insurance will pay an extra 1.5% of their income to Medicare.

-This is an incentive for those on higher incomes to take out private health insurance, which takes some of the financial pressure off Medicare.