Australia is a very large Country with current total population around 24.8 million as per Worldometer. According to AIHW (Australian Institute of Health and Welfare, 18 July 2018) the average life expectancy is 80.4 years for Men and 84.6 years for women as in 2014-2016. This indicates that Australians are benefited by comprehensive Health Care System which is solely funded by Taxation and encouraged by public.
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Australia is spending around $150 billion AUD which is 9% of the GDP on Health Care System annually with current relatively young population. It is projected people aged 65 and over is estimated to reach 22.4% by 2054. The growing aged population has increased the health cost and has put extra burden on budget. One fifth of the population has multiple chronic health disorders and one third of the population over 45 years of age has long-term health issues. Which is a huge burden to Australian Government and it challenges the efficiency of the existing Health Care System. Promoting and encouraging Private Health insurance is considered as a Major health reform as it has high positives for the population and add a relief to the Health care system in terms of funding (Health reform in Australia, Compare the market, n.d.).
Dual Health care System is followed in Australia where both Private and Public health care is regulated by “Medicare” which was started in 1984. Australia holds the fourth place in highest life expectancy and has best infant mortality among other countries in the world. With the increasing ageing population it becomes harder to hold the same efficiency as the cost of Medical care and services involved is increases rapidly. The funding from the States and its Territory and Commonwealth to the Public Health Care is growing rapidly and raised a serious concern in budget. In order to maintain the same quality Health care and to improve further in their Health care efficiency Private Health Insurance is preferred and suggested. Private Health Insurance was introduced in Australia over 150 years ago foreseeing the future of Medical industry and the cost that might involve in the treatments and after care (Private Health Care Australia, 2017-2018).
Population who have opted for the Private Health Insurance 84% of them have given an opinion that they would prefer and continue with the Insurance. The reasons are the flexibility, choice of Doctor, quality and to avoid long waiting times in the Public system. It will become more difficult to depend on the Public Health care with the growing population. 52% of the Population feels whether the Public care would exist after 15 years in the current trend and 44% of the population doubt the existence of Mixed Health care system (Private Health Care Australia, 2017-2018).
The Australian Government strongly supports Private Health Insurance industry and its regulation is controlled through Private Health Insurance Administrative council which is a permitted authority under National Health Act 1953 and National Insurance Act 1973. As on 30 June 2004, six prominent Health Insurance companies hold around 76% of the Private Health Insurance shares. Private Health Insurance funds are tightly monitored and executed without any discrimination between the policy holder and service providers. That means no individual is denied of the Health Insurance policy and also the premium and cover remains applicable as per policy rules and regulations (J Healy., E Sharman. and B Lokuge., Health System in Transition, Vol.8 No.5 2006, Pg 35).
Private Health Insurance provide cover to the population to some or total Health cover based on the policy opted (General cover or Hospital cover) by the individual. By having Private Health Insurance one can have peace of mind as the cost involved is covered for treatment and the issue can be addressed straight away without any delay. The patients get a choice to choose the practice, doctor and even the date they wish to get treated based on their convenience.
The Hospital cover gives the benefits to get treated at Hospitals as Private patient and this covers some or all health issues including doctors fee, hospital charges and accommodation.
The General cover supports range of services like Dental, Optometry, Podiatry and Physiotherapy. The choice of the package for Health Insurance depends on the individuals and the range of covers they would like. Premium might vary according to the policy and cover individuals chooses and also age group, as they grow older higher will be the premium. There is choice for individuals to have either one of the above mentioned Insurance cover but most of them prefer to have a mixed cover to get access to various health cover benefits (The Department of Health, Private health Insurance, 8 March 2017).
Private Health Insurance is the key player contributing to health funding allocation by the Australian government and reduces the burden of the increasing Health care costs in recent years. As the technology is advancing in speed in recent years (1990’s to date) the cost of the health services and the medication costs are increasing rapidly. The variety of options is demanded by the population to fulfil their health needs and with the growing ageing population the Health care budget is a huge concern to the government (Health System in Transition, Vol.8 No.5 2006).
Having above noticed benefits Australia is encouraging people to opt for Private Health Insurance. The Government is promoting Private Health Insurance by providing lots of Benefits to its individuals. One of which is Taxation rebate. This can either be claimed at the end of financial year through Australian Taxation Office (ATO) or use it towards their Health Insurance Premium reduction.
Tax rebate varies based on individual circumstances like whether the individual is Single or a family member. The Tax rebate is divided into three levels based on their income.
For a Single individual whose income is than AUD 90K per annum and age below 65 years will get a tax rebate of 25.415%, for those between age between 65-69 years 29.61%, for age over 70 years 33.887% and for families with a total earnings of less than AUD 180K per annum will also be eligible for the same Tax rebate. This category is known as Base Tier.
The Tier 1 income group is between AUD 90,001 to 105000 who is single and below age 65 will be eligible to get 16.943%, age between 65-69 years 21.180%, age above 70 will be 25.41% and the same Tax rebate applies to the families with total earnings between AUD 180001- 210000 per annum (Australian Government Private Health Insurance Rebate, n.d).
Tier 2 income group will enjoy the Tax rebate as explained. The earnings by a individual between AUD 105001 to 140000 and below age 65 the Tax rebate is 8.471%, age 65-69 is 12.707% and age above 70 years is 16.943% and the same tax rebate applies to families with total income per annum between AUD 210000 to 280000. For all incomes above 280000 AUD either individuals or family earnings per annum will have no tax rebate on their Insurance. (Australian Government Private Health Insurance Rebate, n.d).
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Private Health Insurance is undergoing reforms periodically to encourage people to get into and remain in Private Health Insurance scheme. As we are aware, the premium goes high with increasing age and working class population will be able to afford and remain in the scheme. Once they become a pensioner question arises how many of them are still in this private health insurance scheme. In order to encourage aged population to remain in Private Health Insurance scheme, recently in 2018 one of the amendments made in Private Health Insurance is age based discounts.
The government is encouraging the population to have Private health Insurance by giving age based discount as early as 18 years (Private Health Insurance (Reforms) Amendment Rules, 2018).
Currently the contribution Private Health Insurance is 9% towards Health expenditure. If this percentage is increased it will ease the burden on Australian public health system.
The World Health Organisation Goals of a Health system are providing absolute care and health services to all population regardless of their socio-economic status, religion, income, sex and geographical conditions. Also the efficiency, responsive to the health needs of the population and financial protection becomes the major factors (Western Pacific Regional Strategy for Health Systems Based on the Values of Primary Health Care, Goals of Health System, n.d.).
As per AIHW 2016-2017 statistics around 748,000 Australians were admitted in the public hospitals for elective surgery among them 1/5th were for the general surgical procedures and 15% of them were for orthopaedic procedures like joint replacements and other procedures. It is noted that they has been 2.9% increase in the patients added to the elective surgery waiting list when compared to 2012-2013 and 2.0% increase in admission to the public hospitals were noted for the elective surgery. An Average waiting time was ranging between 38 days to 258 days based on the procedures and its urgency. Median waiting time for elective procedures for indigenous people was 45 days when compared to 38 days for other Australians. 2.0% of indigenous Australians waited more than a year when compared to 1.7% of other Australians (Elective Surgery waiting times, AIHW, 21 December 2017).
Private Health Insurance data suggests that almost two third of elective surgeries and procedures are funded by Private Health Insurance, 9 out of 10 hospital day stay for mental health care and half of all mental health admissions, two-third of joint replacements, more than half of chemotherapy and 8/10 retinal procedures are executed in private sectors. In addition under the scheme of extras cover, health funds pay out more for dental care than the federal government (Private Healthcare Australia, March 2017). These procedures and surgeries done in private system will free up the total capacity and reduce the long waiting queues in the Public system which in turn enables unaffordable population to access public health care.
The recent reforms in Private Health Insurance announced by the government are towards allowing customers to take more responsibility towards their own health. With the introduction of different policy options like gold/silver/bronze/basic products, consumer will know the level of care at the chosen level and their eligibility to use the services. Policies are defined clinically with inclusions and exclusions criteria aiming towards improvements on membership. Consumer’s complaints are aimed to be addressed early and clearly through giving more power to Private Health Insurance ombudsman. The customers are given opportunity to use insurance in public hospitals. In addition to the above, some improvements made to make policies affordable are increasing the excess for hospital admissions, keeping the premium low and reduced the cost of the prosthesis and medical devices that the Private Health Insurance pays (Reimagining Health Care in Australia, December 2017).
Every year Government is investing Six billion towards Private Health Insurance rebate. Taking these changes into considerations, consumers would be able to make informed choices about the treatment for their policies. These above changes will empower the consumers and their access to health care which would improve overall health outcome. With well defined policies (inclusion and exclusion criteria) there are very well protected during their illness given they have the right policy. Having Private Health Insurance, patient living in rural and regional areas are provided with travel and accommodations facilities if they need to travel to tertiary centre for treatment if needed. Mental health conditions has been a biggest challenge for Australian health system, it is noted that around 45% of all Australian would have mental health issues in their lifetime. Changes are made which enable people to upgrade their policy and access mental health service without any waiting period. More attention has been paid to promoting awareness, improving prevention through holistic approach, removing hurdles to access care and help from their clinical service providers. These interventions support to keep people healthy.
These options of Private Health Insurance would reduce the existing inequalities and discriminations towards access to health care system (Reimagining Health Care in Australia, December 2017).
Finally I conclude that Private Health Insurance is one of the major supports to the Public Health system and also to the population which helps to sustain comprehensive health care in Australia in modern era of medicine with growing new technologies and increased cost of treatment. However, more reforms in Private Health Insurance should be considered on periodic basis towards well being of the population.
References
- Australian Government Private Health Insurance Ombudsman (n.d.), retrieved October 26, 2018 from,
- https://www.privatehealth.gov.au/healthinsurance/incentivessurcharges/insurancerebate.htm
- Australian Institute of Health and welfare, 18 July 2018, retrieved October 25, 2018 from, https://www.aihw.gov.au/reports/life-expectancy-death/deaths-in-australia/contents/life-expectancy
- Compare the market (n.d.), retrieved October 25, 2018 from – https://www.comparethemarket.com.au/blog/health/health-reform-in-australia/
- Department of Health, Private Health Insurance, March 8, 2017, retrieved October 27, 2018 from,
- http://www.health.gov.au/internet/main/publishing.nsf/Content/Frequently+Asked+Questions-1
- Elective Surgery waiting times, Australian Institute of Health and Welfare, December 21, 2017, retrieved November 2, 2018, from,
- https://www.aihw.gov.au/getmedia/a7235c2d-3c90-4194-9fa1-b16edf7ff1f0/aihw-hse-197.pdf.aspx?inline=true
- Judith Healy., Evelyn Sharman. and Buddhima Lokuge. (2006) Health System in Transition, Vol.8 No.5 2006, Australia Health System Review, retrieved October 28, 2018.
- Private Health Care Australia, 2017-18, retrieved October 27, 2018 from, https://www.privatehealthcareaustralia.org.au/wp-content/uploads/Private-Healthcare-Australia-Budget-Submission-2017-18.pdf
- Private Health Insurance (Reforms) Amendment Rules, 2018, retrieved October 28, 2018 from, http://www.health.gov.au/internet/main/publishing.nsf/Content/464F7973C0D9D522CA2582CB0079BA04/$File/PHI%20Amendment%20Rules%20v%201.13%20Exposure%20Draft.pdf
- Reimagining Healthcare in Australia, December 2017, retrieved November 3, 2018, from,
- https://www.pwc.com.au/pdf/reimagining-healthcare-phi-dec17.pdf
- Western Pacific Regional Strategy for Health Systems Based on the Values of Primary Health Care, Goals of Health System, n.d.), retrieved October 29, 2018, from, http://www.wpro.who.int/health_services/action/regional_strategy_health_systems_primary_health_care_chapter3.pdf
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