Health Insurance Blog Health Insurance Made Simple

29Jan/100

2010: The Year For Major Health Reform in Australia

Following two major reports outlining the effects of the aging population on our economy, Prime Minister Kevin Rudd declared that without policy change, State Governments will run massive deficits due to the rapid rise of health spending and limited growth of government revenue.

While health costs are growing at 11 per cent a year, tax revenue is growing at 4 per cent a year as a result of fewer individuals entering the workforce. If this continues, the Treasury projects that by 2045-46, the total health spending of all states will exceed 100 per cent of tax revenue.

Forty years ago, spending on health services and aged care amounted to some 1 per cent of Australia’s annual Gross Domestic Product, this figure has now increased to 4 per cent. By 2050, it is projected that it will increase to 7 per cent. In dollar terms, this would equate to $200 billion across 40 years. These figures do not include individual spending on private health insurance and out of pocket payments.

To overcome this threat to the sustainability of government budget and avoid the need to support a crushing deficit, the Rudd government is presented with two choices:

  1. Reduce spending on health services, pensions and aged care
  2. Boosting productivity and growing the workforce to increase tax revenue

Given the country’s aging population, reducing spending on health services and aged care is a far from feasible option, especially given that this money is also being invested in advances in medical technology that ultimately will improve health and increase longevity. With this, the government may be introducing a single funder model for hospitals, with the Commonwealth funding state run health facilities.

Therefore, the Prime Minister aims to reduce the slowdown in economic growth by improving productivity within the workforce by an average of 2 per cent per year. This action will ensure that the government can cope with the rapid increase in health spending in Australia without running into a deficit.

27Jan/100

Take A Load Off

Lifetime Health Cover Loading

It’s easy to think you’re invincible when you’re young and have the world at your feet, but are you really that indestructible?

As technology is helping us live longer, our actions today will have repercussions on our future. So it’s important to consider health insurance at a young age to ward off grief and expenses later on.

Take George for example. From a young age he has always loved to play sport and still has a very healthy and active lifestyle. Unfortunately he needs to undergo regular physiotherapy sessions due to a minor knee injury from his youth. As he did not have private health insurance in his twenties, he was hesitant to get the proper treatment for his knee. Looking back, being insured would have saved him pain, time and money.

Benefits of getting health insurance at a younger age

Did you know that you will have to pay an additional loading on your premium if you’re not covered by age 30?

If you decide to get health insurance after your 30th birthday, and did not have hospital cover previously, you are required to pay a loading of 2% for every year after aged 30. Loading can reach up to a maximum of 70% on top of your premium.

Now aged 40, George has decided to take out cover for his family. Consequently, he has to pay 20% more than some of his mates who first took out hospital cover before they were 30. Only after 10 years of cover, his loading will finally be removed.

Currently in Australia more than 760,000 young people have private cover. This age bracket claims more than one billion dollars for hospital admissions in the past five years. In fact, one in six people aged between 20 and 30 with private hospital cover will go to hospital this year.

Don’t make the mistake of thinking you’re invincible, protect yourself at a younger age and avoid heavy loading later.

26Jan/100

Researching Health Insurance

Researching health insurance is a difficult task. A lot of industry sites are a little confusing, and finding all the various funds can be time consuming. There are a few ways around this however.

Aggregator Sites

A number of sites offer aggregation services, for example there are directories like Word Of Web that have Health Insurance sections. There are also services that specialise in comparison, such as iSelect.

Search Engines

Search engines also offer a lot of choice, with a search for health insurance comparison on Google Australia providing a lot of good sites.

Word Of Mouth

Finally, perhaps the best way to review Health Insurance funds is to ask your friends. Are they happy with their provider? Is the service good? Do they make many claims?  Does it take long to get approved? word of mouth is the best indicator, so before you start, ask as many friends as you can.

25Jan/100

Australian Open to Injury

Australia is currently in the grips of tennis fever. With the Australian open in full swing many may be inspired by the performance of the Aussie stars playing in the grand slam to try their hand at tennis, whether it be recreationally or for competition.

Although having a regular game of tennis can be a great way to stay healthy, for an unlucky few it could potentially trigger injuries such as ‘tennis elbow’ (muscle or tendon damage in the forearm), frozen shoulder and other, more general sports related injuries. Whether they be new, existing or recurring, one of the more common ways to treat the pain of sporting injuries and stay in the game, will be to pay a visit to the physiotherapist.

The need for repeated or prolonged physiotherapy treatments can often create a financial burden for households and individuals as at present, physiotherapy is classified as an ancillary service and as such, options for claiming such services on Medicare is limited to individuals who are eligible for the Enhanced Primary Care program, patients whom have chronic or complex care needs.

Private health insurance can, however, ease the financial pressure that repeated or prolonged physiotherapy treatments can cause. All of the major private health funds in Australia allow individuals or families to claim a number of physiotherapy treatments under general treatment, or extras cover.

Whether it be a standard option as a part of a comprehensive health insurance package, or as an added option in a more customisable health insurance budget package, there are options available for most consumers.

Many Australian private health funds will also allow the consumer to tailor their private health package to focus on a particular set of services, thus further increasing the value provided by membership, especially for those who require additional treatments such as chiropractic treatment or podiatry.

So regardless of whether you are a budding champion or just a recreational player, spending a little time to consider private health cover or re-evaluate your plan can help you rest assured and focus on your game.

20Jan/100

Private Health Insurance Rebates in Australia

The Federal Government re-introduced three bills that would withdraw Health Care concessions for individuals and couples as their income rises.

Although previously rejected by Senate, the following reform package was resubmitted by the Government:

  1. Fairer Private Health Insurance Incentives Bill 2009 [No. 2]
  2. Fairer Private Health Insurance Incentives (Medicare Levy Surcharge - Fringe Benefits) Bill 2009 [No. 2]
  3. Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2]

In a nut shell, these bills propose means-testing the Private Health Insurance Rebate and increasing the Medicare Levy Surcharge in July 2010.

PRIVATE HEALTH INSURANCE REBATE

At present, all Australians who are eligible for Medicare and who are members of a registered health insurer are entitled to rebates of 30%, 35% and 40% on their health insurance premium, dependent on their age:

Age Federal Government Rebate
Under 65 30%
65 to 69 35%
70 or older 40%

Under the existing system, individuals would receive at least 30 cents back from every dollar contributed to their private health insurance premiums; a concession that makes quality health care accessible and affordable for all Australians – no matter the type of cover, level of cover or income. The rebate may be deducted directly from your premium or simply make a claim in your tax return or in person at any Medicare office.

However, if the bills are passed, the entitlement decreases by 10% according to increase in annual income. The proposed thresholds are shown below:

Proposed Federal Government Rebate from July 2010

Singles Income Couples/Families Income Up to 65 years 65 – 69 years Over 70 years
Up to $75K Up to $150K 30% 35% 40%
$75K - $90K $150K - $180K 20% 25% 30%
$90K - $120K $180K - $240K 10% 15% 20%
$12K + $240K+ 0% 0% 0%

MEDICARE LEVY SURCHARGE

Australian taxpayers who do not have private hospital cover must pay a 1% surcharge on their taxable income. (This is in addition to the Medicare Levy of 1.5%)

If approved, the Federal Government propose the following changes to the existing income thresholds and increasing the level of surcharge as shown here:

Singles Income Couples/Families Income Proposed
Medicare Levy Surcharge
$75K - $90K $150K - $180K 1%
$90K - $120K $180K - $240K 1.25%
$120K + $240K + 1.5 %

Changes to the Private Health Insurance Rebate and MLS are yet to be approved and if approved, will not take effect until July 2010. More updates on the rebate and other news about the health care system coming soon.

19Jan/100

Changes to the Extended Medicare Safety Net (EMSN)

From the 1st of January 2010, the Australian Federal Government introduced a cap on some services paid through the Extended Medicare Safety Net (EMSN); an additional rebate for individuals or families who incur out-of-pocket costs for out-of hospital services including general practitioners and specialist visits.

Prior to this change, when an individual or a family’s out-of-pocket costs exceed a certain threshold amount in a calendar year, 80% of out-of-pocket costs incurred through the use of out-of-hospital services is paid through the EMSN for the rest of the calendar year.

For example if Jane undergoes a pregnancy scan which costs her $200. She will receive $60 back from Medicare under the standard Medicare benefits Schedule rebate, leaving her with $140 out-of-pocket cost.

Previous to 2010, if Jane had reached her EMSN for the year, she would receive $112 back from Medicare under the EMSN (80% of out-of-pocket). Therefore the maximum Medicare benefit Jane could claim was $172.

However, due to the introduction of benefit limits, she can only claim a capped amount of $35.55 under the EMSN rebate. Add this to the Medicare Benefit Schedule rebate; Jane would be only eligible to claim a maximum Medicare benefit of $95.05.

Services affected by new EMSN Benefit Limits include:

  • Obstetrics services
  • Some pregnancy related ultrasounds
  • Assisted reproductive technology (ART)
  • One type of cataract operation
  • Injections of therapeutic substances into an eye
  • Hair transplants for treatment of hair loss as a result of disease or injury
  • One type of varicose vein treatment

What does this change mean?

If you or a family member needs to see a doctor or have medical tests regularly you could end up with high medical costs. The new caps on EMSN benefits can have a dramatic affect on out-of-pocket costs. If you or a family member needs to undergo any of the following services in the near future...

  • GP and specialist consultations
  • Ultrasounds
  • Pap tests
  • Blood tests
  • CT Scans
  • X-rays

Its time to consider how your health insurance can continue to provide security for your family.

13Jan/100

Private Health in America

In his weekly address, President Obama has urged Congress to revolve legislative issues that are delaying the health reform being signed into law in the coming weeks.

With average health insurance premiums increasing by 100% since 2000, it is no wonder many families in America are struggling to find an affordable health insurance premium under the current health system.

Obama’s Health Insurance Reform aims to improve the health system by providing more security and stability to those who have coverage, provide coverage to those without and reduce the cost of health care for families, businesses and government.

If all goes well, there will be immediate benefits soon after enactment of the bill.

These include:

  • Citizens with pre-existing illness would be able to buy affordable insurance
  • Children with pre-existing conditions would no longer be denied coverage
  • Small business owners who could not afford to cover employees would receive tax credits to buy insurance.

These benefits are due to take effect within the first year of reform. With many changes to come, President Obama aims to reach long term goals of improving America’s health system.

Health Reform Progress

Children’s Health Insurance Reauthorization Act ensures quality health care to 11 million children

American Recovery and Reinvestment Act protects health coverage affordable for Americans who lose their jobs

Recovery Act invests over $22 billion into the areas of:

  • Reducing medical costs
  • Improve quality of health services
  • Ensure Patient Privacy by computerising medical records
  • Research into best treatment decisions
  • Training next generation of doctors
  • Promoting prevention and wellness to improve America’s health