An Independent Queensland Regional & Rural
(Cairns... Far North Queensland)
WHAT IS MEDICARE?
Medicare is Australia's universal system for financing public hospitals and services provided by private doctors and some additional health costs. It was introduced by the Federal Government in 1984 to ensure all Australians have access to medical and hospital care when they needed it. Before Medicare, most Australians had to buy private health insurance, use hospitals as public patients or pay their own bills.
Medicare is based on several key principles, including:
What does Medicare cover?
Medicare rebates are linked to government-set Schedule Fees for medical and optometrical services provided by private practitioners.
Rebates are generally 85 per cent of the Schedule Fee for out-of-hospital services and 75 per cent of the Schedule Fee for hospital in-patient services provided to private patients.
Access to bulk billing is limited only by the practitioner’s decision whether or not to bulk bill.
Access to public hospital in-patient, emergency and outpatient services is free-of-charge for Medicare patients.
A family-based safety net protects high users of medical services from big out-of-pocket costs. This covers the difference between the Medicare rebates and the Schedule Fee for families who exceed a threshold level of payments in a year, but not for charges that are above the Schedule Fee.
How does Medicare work?
Schedule Fees set by the Federal Government set guidelines for the costs of medical and optometrical services provided by private practitioners. However, practitioners have the right to set their own fees. Some choose to offer bulk billing, and some do not.
If a practitioner does not offer bulk billing, patients are billed for the service they receive. The patient is then able to claim a Medicare rebate from the Health Insurance Commission (HIC).
These rebates are set to match schedule fees. All charges above the schedule fee/set rebate are the responsibility of patients.
Private insurance is also available for the 25% "gap" between the rebate level and the schedule fee for private hospital in-patient services, but generally not for charges above the schedule fee.
When a practitioner bulk bills, they send their claims to the HIC which then pays the rebates direct to the practitioner. This means no account goes to the patient and there is no extra charge to them above the rebate.
In 1998, over 70% of all services covered by Medicare were bulk billed with no out-of-pocket expense.
How does Medicare work - public hospital services?
Public hospital services (and many community based heath services) are provided by State and Territory governments. The Federal Government assists providing funds from its tax revenue to supplement funds from State and Territory taxes and charges.
In exchange for Federal funds the States and Territories agree - through the Australian Health Care Agreements - to provide public in-patient, outpatient and emergency services without charge. This agreement is designed to protect every Australian's right to be treated in a public hospital by a hospital-appointed doctor at no direct cost.
People may also elect to be private patients in public hospitals. This enables them to choose their own doctor. However, in this case they are charged for their hospital accommodation and associated costs and for the medical services provided by the private doctors who treat them.
Currently, around 30% of Australians take out private health insurance to help them with these costs.
Who pays for Medicare?
All taxpayers contribute to the cost of Medicare through general taxation. This is the main source of Medicare funds. In addition there is a Medicare Levy, graduated according to taxable income.
A 1.5% levy is imposed on individuals with a taxable income of up to $50,000 per annum and on families with a taxable income of up to $100000 per annum. For those on higher incomes, the levy increases to 2.5% unless they have private health insurance. Meanwhile low-income earners are exempt from the Medicare levy but contribute through indirect taxes.
There are also direct user charges above rebate levels.
These progressive taxation arrangements mean that, on the whole, people contribute in line with their income. This is in contrast with private health insurance arrangements where contributors pay the same amount for the same level of cover, regardless of income.
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Written and Authorised by Selwyn Johnston,
Cairns FNQ 4870