Health Care Down Under

"Here's an example of the mindset we have here that is second to none: It's called the TAC - the Transport Accident Commission. Put simply, each of us pays a very small tax each pay check on a sliding scale that the TAC puts into a pool. If you get into a car/motorbike accident and if it is not your fault, the TAC pays every single cent of your costs. I know, I experienced it. I was in a motorbike accident 10 years ago. At the time I was unaware of the TAC's benefits and honestly, as I lay on the ground in pain with cops around me yelling at cars to slow down, I actually worried that I would be bankrupted by the accident even though it wasn't my fault and even though I had private insurance but not much of a policy at the time. Lo and behold, I filed my claim and the TAC could not have been more efficient and compassionate. Paid everything right down to my aspirin."

Insurance is a promise, an intangible, a hated monthly expense until the moment it is needed. And if/when the insurance fulfills its promise, there is nothing else that matches its level of value. The above quote is from my friend Wendy who I have known since high school. Wendy grew up in Ohio, but has lived in Australia for decades. I recently asked her about their health insurance system. She provided some personal info, some links, and the TAC story.

Your personal experiences will determine your impression of our system, just as Wendy’s impacts hers. Our ongoing debate about health insurance in the USA, our way to access and pay for health care, is a 50/50 mix of fact and emotion. We are often told that America is the only western country without universal health coverage. The speakers too often present universal care as being the same throughout the world. It is not. Each country has tinkered with the concept, utilized or prohibited private coverage, and struggled with the challenges of expensive medications and therapies. The Australian Medicare system appears to be closer to our hodgepodge of coverages than it is to Canada’s. That doesn’t make it better or worse, just different. And if you are sick or injured and the insurance fulfills its promise, it is perfect.

The Australian Medicare system is funded by a 2% levy (tax) on taxable income. This provides access to the public system. The public system covers the cost of visits to a general practitioner during normal business hours most of the cost of a semi-private room at a public hospital. Your choice of physician, operating rooms and out-patient prescriptions are not included in the Medicare system. The patient is often expected to pay the cost of care and is then reimbursed by Medicare. Australians also have access to a variety of private health insurance programs.

Just to be clear, bureaucratic writing is universally dense. The following is from the official Australian Medicare site:

Need for private coverage:

• If you have an appropriate level of private patient hospital cover, you won't have to pay the MLS, and depending on your income, you may be eligible for the private health insurance rebate. This rebate is an amount the government contributes towards the cost of your private hospital insurance premiums.

 

You may be entitled to an exemption from MLS for part or full year. This will be determined from the information that you provide in your tax return.

Depending on your circumstances, the Medicare levy, the MLS or variations to your private health insurance rebate may impact the refund you receive or the tax you owe.

If the MLS has resulted in you owing tax, you can take steps to avoid a liability in the future by:

• reviewing your rebate

• taking out the appropriate level of private hospital insurance

 

varying your PAYG withholding

For those who are interested, I am happy to include relevant links to the official site for further research.

• Home Page

• Income Tax

• Private Insurance and Rebates

• Private Insurance Options

 

The Australian public system offers access. Their private system offers choice. It is a two tier system that would be easier to implement in the United States than many of the other ideas currently being tossed about in Congress and on TV. As with any system, Australia’s Medicare has its champions and detractors. President Trump has been quoted as being a fan. A more detailed and thoughtful analysis can be found in this 2016 Guardian article from Doctor Ranjana Srivastava, a doctor who works in the public system.

Back to Wendy:

"We also carry private insurance to cover things not provided by Medicare but also because we don't always want to depend on the public system. For instance, my GP just referred me to a surgeon in the public hospital system. Since it is not urgent I will likely wait 2-3 months for an appointment but it will be fully covered. I could chose to go private based on my policy and get faster service and I have done that in the past. It just depends on what I need.

If you don't have private health insurance you get a tax penalty anyway. I think I pay about $1400 annually for health insurance. I think that's fantastic."

Different countries, different systems. It is important to remember that there are almost as many ways to access and pay for health care as there are countries. As we begin a new, and hopefully serious, discussion on how to improve ours, let’s take the time to learn about other systems so that we can avoid their problems and build upon their successes.

DAVE

www.cunixinsurance.com

Picture – Australia – David L Cunix