The Medicare levy has never actually covered the cost of our public health system. It's theoretically a hypothecated tax that goes to health care, but the system is funded, like everything else, out of general revenue.
The system in Australia is:
* All Australian permanent residents (and some travellers) are able to access Medicare services. The services are funded by a combination of Federal and State governments.
* GPs/Surgeons/Specialists get set amounts from Medicare for different services delivered to patients. The amounts are set by the Federal health department and is the subject to ongoing arguments between the service providers and the government about the amount paid.
* For GP and out patient services, if the provider is willing to deliver the service at the set amount, then they "bulk bill" and the service is delivered "free at the point of delivery" to the paitent. If the provider charges more, then there is a "gap" that must be paid by the patient and cannot (by law and regulation) be covered by private insurance.
* For in-patient services, patients are either "private" or "public". Publicly funded hospitals accept patients of both types, private hospitals only accept "private" patients.
* Private patient services still receive the same reimbursement at a set value from the government. However, if the provider charges over that rate, private insurance is allowed to cover that "gap". Insurance companies can offer differing plans with different levels of cover for that "gap", as well as offering things like single patient wards, choice of physician/specialist etc.
* Public patients in a public hospital receive exactly the same services as private patients, but they: a) don't get to choose their doctor, b) are subject to waiting lists based on capacity, degree of urgency, etc.
* A public patient at a public hospital receives all services "free at the point of delivery". Private patients receive the same reimbursement, then their private insurance will reimburse according to their plan, then any remaining "gap" is payable by the patient.
* The "Medicare levy" is a theoretical additional tax that is added to a person's marginal tax, but it has never really covered the cost.
* As an incentive to get private insurance, the government subsidizes it at 30% and there are sticks and carrots (increased Medicare levy, age related reduction in subsidy if insurance is not continually held etc).
* Private insurance price increases are government regulated and require approval of the minister each year.
Subsidies for prescription medicines is a completely different system (the "PBS").
The system in Australia is:
* All Australian permanent residents (and some travellers) are able to access Medicare services. The services are funded by a combination of Federal and State governments.
* GPs/Surgeons/Specialists get set amounts from Medicare for different services delivered to patients. The amounts are set by the Federal health department and is the subject to ongoing arguments between the service providers and the government about the amount paid.
* For GP and out patient services, if the provider is willing to deliver the service at the set amount, then they "bulk bill" and the service is delivered "free at the point of delivery" to the paitent. If the provider charges more, then there is a "gap" that must be paid by the patient and cannot (by law and regulation) be covered by private insurance.
* For in-patient services, patients are either "private" or "public". Publicly funded hospitals accept patients of both types, private hospitals only accept "private" patients.
* Private patient services still receive the same reimbursement at a set value from the government. However, if the provider charges over that rate, private insurance is allowed to cover that "gap". Insurance companies can offer differing plans with different levels of cover for that "gap", as well as offering things like single patient wards, choice of physician/specialist etc.
* Public patients in a public hospital receive exactly the same services as private patients, but they: a) don't get to choose their doctor, b) are subject to waiting lists based on capacity, degree of urgency, etc.
* A public patient at a public hospital receives all services "free at the point of delivery". Private patients receive the same reimbursement, then their private insurance will reimburse according to their plan, then any remaining "gap" is payable by the patient.
* The "Medicare levy" is a theoretical additional tax that is added to a person's marginal tax, but it has never really covered the cost.
* As an incentive to get private insurance, the government subsidizes it at 30% and there are sticks and carrots (increased Medicare levy, age related reduction in subsidy if insurance is not continually held etc).
* Private insurance price increases are government regulated and require approval of the minister each year.
Subsidies for prescription medicines is a completely different system (the "PBS").