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Introduction to Health Care in Australia
Australians receive universal health care coverage from the Commonwealth Government through Medicare. This results in the government paying a percentage of an individual's health care costs which are calculated based on the Medicare Benefits Schedule, whether a patient is a concession card holder and a patient's total health care expenditure in a year.
For Australians using the system as patients it is important to understand the differences between bulk-billing and non-bulk-billing, how to claim back expenses from medicare and how you are protected by the Medicare Safety Net.
Some services are not covered by Medicare, most notably most dentistry and ambulances, and this, along with reducing out of pocket expenses, is part of the reason why some Australian choose to also take out private health insurance.
The Medicare Benefits Schedule
Put simply the Medicare Benefits Schedule is a list of all the expenses covered by Medicare and how much Medicare will pay for them. It is a large document of nearly nine hundred pages which is updated every month.
There are a range of government issued concession cards which entitle the holder to greater coverage by Medicare and sometimes cheaper medicine. An individual's eligibility for a concession card is determined by their income, age and number of dependant children among various other factors.
Concession cards include:
Commonwealth Seniors Health Card
Ex-Carer Allowance (Child) Health Care Card
Foster Child Health Care Card
Health Care Card
Low Income Health Care Card
Pensioner Concession Card
Bulk-Billing Compared to Non-Bulk-Billing
When a doctor bulk-bills it means that they bill Medicare directly instead of the patient themselves. This means the patient will not have any out of pocket expenses, nor will they have to make a claim with Medicare for their expenses to be reimbursed. They simply need to sign a form at the conclusion of their doctor's visit. The amount that the doctor bills Medicare for is set at 85% of the price set in the Medicare Benefits Schedule. This allows the doctor to avoid some costs associated with billing, unpaid bills and debt collection.
For doctors that do not bulk-bill a patient will receive a bill from the doctor. They must pay this bill from their own pocket. After payment of the bill has been made the patient is able to make a claim to Medicare and will be reimbursed for 85% of the price of the treatment as stipulated by the Medicare Benefits Schedule. It should be noted that a doctor may charge more than the price set in the Medicare Benefits Schedule, so the patient may be out of pocket more than 25% of the total cost.
The Medicare Safety Net
The Medicare Safety Net is a mechanism designed to protect patients who require expensive or ongoing medical treatment from unreasonably high bills. It is separated into two parts, the Original Medicare Safety Net and the Extended Medicare Safety Net, which work together.
The Original Medicare Safety Net sets a limit to your gap costs, once a threshold is reached your benefit is increased. Gap costs are defined as the difference between the Medicare rebate you have received (85% of the amount stipulated in the Benefits Schedule) and what you have paid you medical practitioner up to a maximum of 100% of the Benefits Schedule's amount.
For example, If you saw your doctor and you were billed for $150, but the Medicare Benefits Schedule listed the treatment your doctor provided at $100, you could then get a rebate from Medicare for $85 (since that is 85% of the Benefits Schedule price). You would need to pay the extra $75 to the doctor from your own pocket, but only $25 would count as a gap cost (since that is the difference between 85% and 100% of the Medicare Benefits Schedule price).
Once your gap costs reach a certain threshold amount then you will be able to claim Medicare rebates for 100% of the price, as indicated on the Benefits Schedule, for treatment. In 2013 the threshold amount is set at $421.70.
The Extended Medicare Safety Net is similar to the Original Safety Net, but instead of setting a threshold for gap costs, a threshold is set for total out of pocket expenses. Once this threshold is reached you are eligible for Medicare rebates for 80% of your total out of pocket expenses for the remainder of the year. The threshold for 2013 is set at $1221.90, or $610.70 for concession cardholders.
To follow through the earlier example, because you spent $150 but were only rebated $75 by Medicare, because you had to pay $75 of your own money that would go towards your total out of pocket expenses for the year.
Australia's health care system is much fairer than many offered in other parts of the world. There are still areas where it can be improved, and no doubt there will be reform in the future. The best example of this is the growing number of calls for Medicare to also cover dental treatments, sometimes dubbed denticare, however this is probably still many years off. As an Australian it is comforting to know that an unforeseen accident or illness is unlikely to bankrupt you as we often hear about happening in the USA.