Ruqayyah Snyder
Australia's healthcare system operates under a shared public-private model, with the public system funded by local, state, and federal governments, and the private system funded by private health insurers. Private health insurance allows Australians to be treated in hospital as private patients, giving them the ability to choose their doctor and room, and often reducing waiting times. It also helps pay for healthcare costs that Medicare doesn't cover, such as physiotherapy, dental, and optical. While not compulsory, private health insurance is encouraged by the government through tax incentives, and in 2013/14, around 47.2% of Australians had private health insurance with hospital cover.
| Characteristics | Values |
|---|---|
| Number of people with private health insurance | 14.8 million (47.2% of Australians) |
| What it covers | Hospital cover, general treatment (extras) cover, or both |
| Who can get it | Australian citizens, permanent residents, and some visitors and visa holders |
| Who provides it | Only registered health insurers can provide private health insurance |
| Benefits | Faster access to some hospital services, choice of doctor, private room, cover for accommodation in a ward, theatre fees for surgery |
| Cost | Varies depending on policy and age of enrollee |
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What You'll Learn
Private health insurance
By law, only registered health insurers can provide private health insurance. Some health insurers can only offer policies to specific industries, companies, or groups, and are called restricted insurers. Private health insurance works alongside the public healthcare system, giving individuals more choice and quicker access to some health services.
International students who are unable to return to Australia due to COVID-19 should contact their private health insurer to discuss options for extending or suspending their cover. The government encourages individuals to purchase private health insurance through tax incentives and the private health insurance rebate scheme, where the government contributes up to 30% of the premium for those covered by Medicare.
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Medicare
The Australian government encourages individuals to take out private health insurance through tax incentives and surcharges. For example, individuals over 35 without private health insurance must pay a Medicare levy surcharge of up to 1.5% of their taxable income. On the other hand, those with private health insurance may be eligible for a rebate of up to 30% of their premium.
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Public vs private hospitals
Australia's healthcare system operates under a shared public-private model underpinned by the Medicare system, the national single-payer funding model.
Public Hospitals
Public hospitals are funded by the government and are free for citizens, permanent residents, and people from countries covered by Reciprocal Health Care Agreements. They are usually the first point of call for emergency cases. However, they are often associated with long waiting lists, a lack of choice of doctors or carers, and shared rooms.
Private Hospitals
Private hospitals are owned and managed by private entities and funded by private health insurance. Private health insurance is not mandatory, but the government encourages citizens to purchase it through tax surcharges. This insurance allows patients to be treated as private patients in either a public or private hospital. Private patients can choose their doctor and are entitled to cover for accommodation in a ward and theatre fees for surgery.
Differences
The choice between public and private hospitals depends on the patient's needs and preferences. While public hospitals are more accessible and suitable for emergency cases, private hospitals offer shorter waiting times and more personalised care.
Around half of Australians have private health insurance, and about 40% of all hospital admissions are to private hospitals. However, it is worth noting that around a quarter of people with private health insurance still opt for the public system. This may be due to factors such as the complexity of their medical condition, the availability of specialised treatments, or personal preferences.
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Lifetime Health Cover
LHC loadings apply only to private patient hospital cover and do not apply to general treatment cover (also known as ancillary or extras cover). The government does not pay the private health insurance rebate on the LHC loading component of a policy. If you are transferring between private health insurers or rejoining hospital cover after a period of absence, you should obtain a Clearance Certificate from your previous health insurer and provide this to your new health insurer on or after joining. This will establish your previous LHC loading, if any, and if transferring between insurers, will also provide information about waiting periods you have already completed.
Under the Lifetime Health Cover initiative, if you have private health insurance that provides hospital cover, general treatment ('extras') cover, or both, you are entitled to a private health insurance rebate from the Australian Government. However, the Lifetime Health Cover component of a premium is not eligible for the rebate.
If you are a new migrant to Australia, and are aged 31 or over, you normally have 12 months from the date of your Medicare registration for interim or full Medicare benefits to purchase hospital cover without an LHC loading.
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Private Health Insurance Rebate
Private healthcare in Australia works alongside the public system, giving people more choice and quicker access to some health services. The public system is funded by local, state and federal governments, while the private system is funded by private health insurers and patient payments.
The Australian government introduced the Private Health Insurance Rebate scheme in 1999. This scheme sees the government contribute to the cost of private health insurance premiums. The rebate is income-tested and varies depending on age and income. The rebate applies to hospital, general treatment and ambulance policies provided by Australian-registered health insurers. It does not apply to overseas visitors' health cover.
If you are eligible for the rebate, you can claim it in two ways: as a premium reduction through your private health insurer, or as a tax offset when lodging your annual tax return. If you nominate a higher tier than your actual income, you will receive a lower rebate than your income entitlements. If you nominate a lower tier than your actual income, you will receive a higher rebate than your income entitlements, but this may result in a tax debt.
The rebate is controversial. Critics argue that it is an unfair subsidy to those who can afford health insurance, while supporters claim that it encourages people into the private healthcare system, relieving pressure on the public system.
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Frequently asked questions
Private healthcare in Australia is made up of health service providers that are owned and managed privately, such as private hospitals, specialist medical and allied health, and pharmacies. It is funded by a combination of private health insurers and patients' payments.
In Australia, public healthcare is funded by local, state and federal governments, while private healthcare is funded by private health insurance and patient payments. Public patients in public hospitals cannot choose their doctor and may face long waiting lists, whereas private patients can choose their doctor and may benefit from reduced waiting times.
Private health insurance in Australia covers some of the costs of treatment in a private hospital and can also help cover 'extras' such as dental, physiotherapy, optical and more.
As of 2013/14, approximately 47.2% of Australians had private health insurance with some form of hospital cover. Private Healthcare Australia (PHA) is the industry's peak representative body, representing over 98% of people covered by private health insurance, or over 14.8 million Australians.
Medicare is the government scheme that gives Australian citizens, permanent residents, and some visitors access to healthcare funded through taxes. Private health insurance can be used to cover some costs that Medicare does not, such as physiotherapy, dental and optical. In some cases, you can claim Medicare benefits and use your private health insurance at the same time.
