Health insurance models vary from country to country. As highlighted in our first series of articles on international health markets, governments often dictate the role of private and public health insurance within any country. Milliman has produced a new series of blogs focused on the medical underwriting and risk adjustment practices of eight countries: Australia, Ghana, Ireland, New Zealand, Saudi Arabia, South Africa, Spain, and United Arab Emirates. This is the first article in our series.
The national public health system in Australia—”Medicare”—provides universal health coverage for all Australian citizens and most permanent residents. It provides free or subsidized access to most medical services and prescription pharmaceuticals. It is largely funded from general taxation, including a statutory insurance levy, which is 1.5% of taxable income (some low-income people are exempt or pay a reduced levy). Individuals and families on higher incomes who do not take out private hospital insurance pay an additional means- tested Medicare levy surcharge of 1%-1.5% of taxable income. The remaining funding comes from private out-of-pocket payments.
The benefits received from Medicare are based on medical and pharmaceutical fee schedules set by the government. Medicare usually pays the full schedule fee for general practitioner (GP) services, 85% of the schedule fee for other outpatient services, and 75% of the schedule fee for inpatient services when treated as a private patient in either a public or private hospital. Services provided to public patients in public hospitals are free of charge. GPs and specialists charge on a fee-for-service basis and can choose to charge more than the fees in the schedule.