Understanding theHealth Care System

Before transition Australian Health System & Medicare

After transition Overview of healthcare costs Public and Private systems Negotiating healthcare costs

Government incentives, penalties and rebates Key private healthcare considerations

Healthcare overseas

2

What is this session about?

Register for your Medicare card (through Dept of Human Services) All Australian citizens and Permanent Residents must be

registered with Medicare You are now responsible for all healthcare costs. If you are single, you must register for a card, or you can add

yourself to a family card

Understand Australia’s healthcare system DVA entitlements and coverage (NLHC) Public healthcare system = Medicare Private healthcare = elective option funded by you

Before you transition…

After transition…healthcare

Medicare Benefits Schedule (MBS)

fee subsidises doctors services

• Specialists service fee - 85% Medicare rebate on the MBS fee

• General Practice Service fee – 100% Medicare rebate on the MBS fee

• X-rays, pathology and optometrist performed eye tests• Health plans for mental health and chronic disease

management

Pharmaceutical Benefits Scheme

subsidies prescription

medicines

• Subsidies prescription medications capped at $40.30

Medicare subsidises health services out of hospital through:

Service Service Cost MBS / PBS Fee You Pay

GP Bulk Billing $37.60 $37.60 $0.00

GP Short Consult $86.00* $37.60 $48.40*

GP Long Consult $125* $72.80 $52.20*

Specialist Fee $500* 85% MBS Fee Balance*

Pharmaceutical (PBS) $120.00* $79.70 (balance) $40.30 max

* Examples only costs vary by provider

Out of Hospital scenarios

Medicare covers 100% of costs on admission to a public

hospital as public patient

The hospital will choose the doctors and specialists who

treat you

Waiting lists may apply and are on a needs basis

Public Hospital treatment

Public Hospital – private treatmentHave right to be treated as public patient (even with insurance)You must consent to private treatment and may incur charges Private patient treatment may not provide all of the benefits afforded to a private patient in a private hospital

Private Hospital treatment

You can choose your doctor or

specialist

No waiting periods for treatment

Medicare pays 75% of the MBS fee for specialist doctor

You pay the balance of the doctors total

fee

You should ask about out of pocket costs before treatment

Private Hospital charges

Private Health Insurance - Gap cover agreements Insurers provider ‘Gap Cover Agreements’ may cap or eliminate out-of-

pocket costsClinician’s may participate in = No Gap / Known Gap / No AgreementBe an informed consumer – use of referrals is open

Negotiating your care and treatment

Know the costs of treatment = Informed Financial Consent (Ombudsman)You are entitled to ask your doctor, fund and hospital about gap payments Confirm gap payments with your clinician and hospital before surgery

Health fund will pay all or most of hospital costs

WITHOUT Gap Cover Scheme

USING Gap Cover

Scheme

Surgeon’s fee $700 $538.40MBS fee $334.35 $334.35

Medicare pays 75% of MBS $250.80 $250.80

Fund pays 25% of MBS $83.55 $83.55

Additional benefit paid by fund to doctor as a Gap Cover provider

N/A $204.05

Patient pays

$365.65 for procedure +

$250 health insurance

excess

$0 for procedure +

$250 health insurance

excess

Out of pocket (Gap) scenarioe.g. Colonoscopy in an agreement hospital

Government Incentives

Federal Government Rebate on PHI

Make PHI more affordable

Ease pressure on public hospital system through uptake of Private health insurance

Means tested and indexed rebate – essentially lower % each year

Applies to both hospital and extras cover

www.privatehealth.gov.au

SinglesFamilies

<= $90,000<= $180,000

$90,001-105,000$180,001-210,000

$105,001-140,000$210,001-280,000

>= $140,001>= $280,001

REBATE

Base Tier Tier 1 Tier 2 Tier 3

< Age 65 25.059% 16.706% 8.352% 0%Age 65-69 29.236% 20.883% 12.529% 0%Age 70+ 33.413% 25.059% 16.706% 0%

Government Penalties

Medicare Levy Surcharge (MLS)

All civilians pay the 2.0% Medicare Levy

(through tax return)

Surcharge (MLS) applies to higher income

earners without an appropriate level of

hospital cover

Full-time ADF personnel are exempt

(except where household is not covered and

combined income exceeds threshold

Lifetime Health Cover Loading (LHC)

Penalty for over 30s when you eventually

take out private hospital cover

2% loading on premium for each year over

age 30 without cover to max 70

Loading is removed after 10 continuous

years of hospital cover

Allowed 1094 days without cover over

lifetime without incurring this penalty

Special conditions for full-time ADF

membersNo MLS Tier 1 Tier 2 Tier 3

Single <90K 90K – 105K 105K – 140K >140K

Family <180K 180K – 210K 210K – 280K >280K

All Ages 0% 1% 1.25% 1.5%

Treatment you need -when you need it

Choose when you get care (avoid waiting lists)

Choose who provides the care

Choose where you receive the care

Empowers you to manage your care

Access government benefits

Considering Health Insurance?

Balance between price, level of cover and excess

Use government tiers (Gold/Silver/Bronze/Basic)

Review your cover at different life stages (lower your excess)

Consider DVA and NLHC coverage

Cover needs to suit your lifestyle (risks)

www.privatehealth.gov.au

Comparing Hospital Cover

Premiums reflect the value of benefits

Balance between price, limits & benefits

What will you use, what is important?

Lower premiums or higher benefits

Don’t take extras cover if you will not use it!

Considering Extras Cover

Medicare only covers limited extras services referred by a GP Benefits will vary between funds/covers Benefits typically paid per item benefit or percentage of fee

Choosing Heath Insurance

Waiting Periods• Hospital – 2 months (12 months for pregnancy &

birth)• Extras covers – 2 to 12 months (generally)

Pre-existingConditions • 12 months (even if not formally diagnosed)

Transferring • Don’t be afraid to switch funds – never locked in!

Open versus Restricted funds

• Open funds – open to all consumers to join• Restricted funds – access to particular groups only• Navy Health and Defence Health are not-for-profit

health funds tailored to needs of ADF• Family are also eligible (siblings, parents, children)

www.privatehealth.gov.au

Overseas Travel & healthcare

Consider travel insurance when you

travel overseas

Private health insurance does not cover you outside

Australia

Covers costs of emergency

treatment and evacuation

(1) Register for a Medicare card (through Dept of Human Services) On separation, you are responsible for all healthcare costs ADF Family Health program is no longer available

(2) Understand Australia’s healthcare system Public healthcare system = Medicare Private healthcare = elective option funded by you Public and private compliment each other Be informed on your DVA entitlements and coverage (NLHC)

(3) Understand Government incentives and penalties

(4) Remember Medicare and insurance don’t apply overseas

Key takeaways…

Questions?