Medicare vs Private Health Insurance
Medicare and Private Health Insurance are two of the health care programmes available in Australia, one is the national programme and the other consists of private health insurance policies. Australia has one of the best health care systems in the world. The federal government spends about 9.8% of the GDP on health care which is less than what spent by US and UK, but because of a smaller population and also better management, the system is working efficiently. Of late however, like other countries, Australia too is feeling pressure because of changes in technology, higher expectations of patients and an ageing population. Medicare is the universal health care system in Australia that takes care of all its citizens. But as it is not available for treatment in private hospitals and also because it does not cover many types of illnesses, people have been opting for private health insurance.
Medicare is the national health care program in Australia that intends to provide affordable health care to its citizens in government hospitals. Medicare was initiated by the federal government in 1984 to provide basic health care to all the citizens, especially those belonging to low income groups. Medicare is implemented through revenues generated by levying 1.5% tax on income on all tax payers, and a surcharge of 1% is levied on those belonging to higher income groups. These funds are utilized to pay for the salaries of doctors, nurses and other staff in government run hospitals. The remaining funds are utilized in providing drugs and surgery costs incurred in treatment of patients. Despite being a success, there are inherent limitations in Medicare. The funds are not enough to cover all types of illnesses and also it does not allow for treatment in private hospitals.
Private Health Insurance
As the name implies, private health insurance refers to health policies bought by people from insurance companies to cover the costs of treatment for illnesses and medical emergencies in future. This is over and above the facilities covered under Medicare and provides people with more options while getting treatment for various medical conditions. As facilities in the private sector are considered by people to be better, they opt for private health insurance as Medicare does not allow for treatment by private doctors and hospitals. Private health insurance is encouraged by the government to let more people opt for treatment in private hospitals, and for this very purpose, it provides 30% rebate to people taking private health policies. Anyone who has a private health insurance is eligible for a 30% discount on the cost of treatment in private hospitals.
Difference between Medicare and Private Health Insurance
While both Medicare and private health insurance are concerned with people’s health, the two differ in their scope and objective. Medicare is the universal health care system of the government that comes in handy for the poor and people who belong to lower income groups. On the other hand, private health insurance is the policies purchased by taxpaying people to avail treatment in case of illness in future free of cost. More and more people are today opting for private health insurance as they get a rebate of 30% on treatment costs in private hospitals.
As Medicare does not cover for medical expenses incurred in private hospitals, people go for extra cover and this is why today nearly 50% of the population has bought private health insurance. Government penalizes people for not taking private health insurance if they belong to higher income group by levying a surcharge of 1% that is over the usual 1.5% that is levied for funding Medicare.
Medicare is the universal health care system of the Australian government
Private Health Insurance refers to health policies bought by people from insurance companies.