Advantages and Disadvantages of Australian Health Insurance Models

This report provides a comprehensive analysis of the public and private health insurance systems in Australia. It begins by defining health insurance and highlighting the two primary forms available: universal health insurance and private health insurance. The report explores the advantages and disadvantages of each system, including the benefits of private health cover such as shorter waiting times, access to private hospital rooms, dental coverage, and the ability to choose preferred doctors. It also discusses the drawbacks, such as high costs, complex policies, exclusions, and out-of-pocket expenses. The report then contrasts the advantages of public healthcare, like lower costs and a healthier workforce, with its disadvantages, such as long wait times for elective procedures and potential limitations on services. Finally, the report examines the concept of a single-payer healthcare system in Australia, exploring its potential benefits for the population, particularly for indigenous Australians, and its potential impact on healthcare costs and efficiency. The report concludes by justifying whether there should be a one-payer system of health insurance in Australia.

Running head: HEALTH PLANNING POLICY 1
HEALTH PLANNING POLICY
Name of Student
Institution Affiliation

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HEALTH PLANNING AND POLICY
Analyze the advantages and disadvantages of public versus private health insurance
in Australia.
Introduction
As quoted by Musiima (2019), Health Insurance Association of America defines health
insurance as "coverage that provides for the payments of benefits as a result of sickness or injury.
It includes insurance for losses from accident, medical expense, disability, or accidental death
and dismemberment." Health insurance covers whole or a part of medical expenses as a result of
sickness or illness. In Australia, medical insurance provision takes two forms; the universal
health insurance and the private health insurance (Walker & Ben‐Meir, 2018). This focuses on
both the public and private healthcare where both the advantages and disadvantages shall be
discussed in length.
There are certain people who can benefitfrom private health cover more than others. This
may depend on factors like; age; young family; sports; high risks activities; or poor health. Age
(as people grow older more wrong are likely to happen); starting family (young children have
unpredictable health issues); (Willis, Reynolds &Keleher, 2016) sports (people who are regularly
participates in sports increase their risk of injuries); high risk activities (rock climbing and
bungee jumping is very risky, and the players feels more secure with private cover); and poor
health (people with poor health or who are predisposed to illness benefit from private cover). On
the other hand, people who are generally healthy may not benefit much with private health cover.
Some of the advantages of the private health cover include;
Skipping the waiting list is a benefit for the consumers of the cover as they have shorter
waiting periods when receiving treatment (Yu & Zhang, 2017). Those who want elective surgery

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benefit so much under this advantage as they often wait for long periods. Any surgery that is
planned is referred to as elective surgery. It is not performed under emergency
conditions(Walker& Ben‐Meir, 2018). It includes surgery like joint replacement and cataract
surgery.
The Australian Institute of Health and Welfare (AIHW) figures show that the waiting list
of elective surgery can vary significantly in public hospitals depending on the procedure
required. The shortest waiting time in 2017-18 for heart bypass and individual operations were at
17 days. Septoplasty surgery which involves fixing deviated septum recorded the longest waiting
time with an average of 248 days(Walker& Ben‐Meir, 2018).
In private health cover, the patient has the benefit of enjoying service without
interference with patients who need surgery urgently as opposed to universal health insurance
where patients’ operations can be pushed back to give room for operations that are more
critical(Gillespie, 2018).
In private health insurance patients have the advantage of opting to be treated in private
hospital rooms as opposed to the public hospital where there are four to six people in a single
room with various conditions (Willis, Reynolds &Keleher, 2016). Private rooms are typically
available on request and can help when delivering a baby to be accompanied by your partner.
The other advantage of private health insuranceis that Australian patients can get their
dental covered which is not the case with universal health insurance where even the most
important treatment like dental cleaning or check-up are not covered. In a situation where you
don't have private health insurance only two options works(Gillespie, 2018). You can opt for the
payment of full dental treatments at the private dental clinic or visiting a state-run dental

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clinic(Srivastava, Chen& Harris, 2017). In Australia, however, access to dental clinics is limited,
and eligibility varies in different states.
Although public dental treatment list can be long, a certain group of people is given
priority for treatment access. This is if you make payment in full in private dental treatment
which can be very expensive(Srivastava, Chen & Harris, 2017). In 2016-2017,AIHWfound that
patient out-of-pocket costs contributed up 58% of the $10.2 billion that was spent on dental
services.
The other advantage is that patient can select their preferred doctor or surgeon who will
carry out their operation as opposed to public hospitals where the doctor on duty remains your
option during your operation(Willis, Reynolds &Keleher, 2016). Therefore in a private system,
your preferred doctor will just be available on request.
The patients in private health insurance can avoid the Medicare Levy Surcharge.
Medicare Levy Surcharge encourages people with high income to take off universal health
insurance and embrace private health insurance covers(Willis, Reynolds &Keleher, 2016). At the
time of writing Australian Taxation Office (ATO) recommended that people with income
exceeding $180,000/year as a couple or $90,000/year if a couple are to be subjected to a
surcharge of at least 1% of their income on top of basic Medicare Levy (Zhang et al., 2019). The
office also states that surcharges can raise up-to 1.5% in highest income economies(Yu & Zhang,
2017). The Australian Taxation Office also advice that individuals with sufficient level of private
health insurance hospital cover are to be exempted from Medicare Levy Surcharge payment.
Although private health insurance has all these advantages, there are potential drawbacks
in Australia as well. Even as APRA figures of December 2018 shows that less than half of
Australians have private health insurance, many people agree that private health insurance does

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not outweigh its setbacks(Zhang et al., 2019).. Some identified setbacks that would make people
not embrace private health insurance include; the cost is too high for a majority to afford (Zhang
et al., 2019). Families, couples, or individuals pay premiums in thousands of dollars every year
which typically increases per year(Willis, Reynolds &Keleher, 2016). In 2019, for instance, the
federal government announced an increase of 3.5% on average. However, since as of 1 April
2019 health funds have options of lowering charges for the young customers could paylow
premiums(Yu & Zhang, 2017)..
The other setback is that private health insurance is complex products for the customers
to relate with. Most of the consumers of these products cannot understand this policy due to the
huge variety of products, inclusions, and exclusions of a range of policies. However, the policy
started the simplification process in 2019 thanks to Health insurance reforms(Zhang et al., 2019).
Private health insurance also excludes some treatments. This is determined by the type of
policy you are covered on, and you maynot receive the treatment you needed(Willis, Reynolds
&Keleher, 2016). This also may apply to a comprehensive policy where some procedures and
treatment may not be covered. Also, there is an addition of out of pocket costs since the cover
may only cater to a part of the treatment or procedure(Callander, Fox & Lindsay, 2019). This
means an insurance member could still be needed to pay some extra amount as excess.
Australia delivers health as a mixed system. There are Universal health care and private
providers. Universal health care is referred to as public government health cover while private
healthcare providers refer to insurers (McIntyre et al., 2016). In Australia, public hospitals and
primary healthcare provide most of the healthcare, and the remaining healthcare (i.e.,
physiotherapy and dental) is provided by the private sector (Willis, Reynolds & Keleher, 2016).
Some of the advantages associated with public healthcare include lowering the cost of healthcare

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in an economy. This means that the prices of medication and medical services are controlled by
the government through regulations and negotiations (McDonald, &Duckett, 2017).
Public healthcare also removes the cost of administration needed to deal with different
private health insurers. There is only one government acting as an agency which doctors deal
with.
The standard of services offered by doctors at public hospitals is similar to all and at low
prices. Where the medical environment has so much competition like in US healthcare providers
pays attention to the new technology (Walker& Ben‐Meir, 2018). They pay doctors well and
compete to give expensive services to the patients through targeting the wealthy by charging
more for high profit.
Throughuniversal health care, there is the creation of a healthier workforce.Many studies
agree that preventive care minimizes the usage of expensive emergency rooms(McIntyre et al.,
2016). As in the case of the US, before the introduction of Obama care, 46 percent of patients
used emergency rooms as their primary care physician (Squires & Anderson, 2015). The
inequality in healthcare results to a high cost of medical care.
Several disadvantages also accrue from this public healthcare and include forcing healthy
people to pay medical care for others. 85% of health care costs are made from chronic diseases
like heart disease and diabetes (Squires & Anderson, 2015). Better lifestyle choices can help
prevent these diseases. Those who have a chronic illness (5% of the population) consume 50% of
all the healthcare health care costs (Willis, Reynolds &Keleher, 2016). Only 3% is consumed by
50% healthiest out of the total healthcare costs.
Long wait times for elective procedures are mostly reported in the universal health
system. The main government focus goes to the provision of emergency and basic health

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care(Kay&Boxall, 2015). To keep cost low the government of Australia limits the payment
amounts and the doctors may have less incentive for providing quality health care if they are
underpaid (Kay &Boxall, 2015). They may opt to spend less time on every patient to reduce their
cost. This is as a result of less funding for new life-saving technologies.
Universal health cover also forces the government to limit services making its probability
of success low. Drugs for rare conditions may also not be covered and may prefer palliative care
over the expensive long ones (Musiima, 2019). In the last six years, patients' care made
consumed a quarter of Medicare cove r(Eckermann& Sheridan, 2016). A fifth underwent
surgery while one third underwent an intensive care unit.
Justify whether you agree or disagree that there should be a one-payer system of
health insurance in Australia.
Single-payer healthcare refers to a type of universal care where taxes that cover the cost
of essential healthcare finance all residents. The costs are covered by a single public
system(Carroll &Frakt 2017). This system can contract for healthcare services from private
hospitals or employ healthcare personnel and facilities to carry out their duties(Eckermann&
Sheridan, 2016).
In Australia unlike in the US healthcare is provided by both the public and private
institutions (Mossialos, Wenzl, Osborn &Sarnak, 2016). The public healthcare termed Medicare,
or universal healthcare is funded by the government of Australia (Willis, Reynolds & Keleher,
2016). It was established in the early 1980s and worked with a private health system
(Woolhandler & Himmelstein, 2017).
A single-payer system would make Australians healthier. Since many indigenous
Australians have no insurance or others have high deductibles, they wait longer when seeking

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care making their illness even more and difficult to treat (Martinson & Reichman, 2016). Many
indigenous Australians suffer injuries, have disabilities and ill-health which results in the poor
quality of life and decreased productivity. Some of them die as they wait to get medical care.
A single-payer system has a wider choice of doctors, and people do not keep changing
doctors when they get transfers, or their employer finds a low-cost health plan (Martinson
&Reichman, 2016). This system ensures continuity and bettering of care as problems are
detected and treated earlier when they are not too expensive for both the patient and the hospital
(Woolhandler & Himmelstein, 2017). If this is supported in Australia, more indigenous
Australians will receive vaccines for preventive care (Martinson&Reichman, 2016). This would
improve general healthcare among the Australians communities especially in regards to social
problems caused by addiction and untreated illness.
Most business under the one-payer system can save money and greatly reduce
administrative cost(Rosella et al., 2018). This because there is more efficiency in a single-payer
system than the usual system as a single-payer healthcare care system cost less saving more
money for businesses(Yu & Zhang, 2017).
Conclusion
Taking a health insurance policy is essential for all the people across the world. More
importantly indigenous Australians who have high riskof contracting diseases due to
socioeconomic factors should be covered. If indigenous Australians can afford private health
insurance it is advisable to have them covered due to the risks associated with them that require
continuous doctor check-up. Healthy people are more disadvantaged by healthcare insurance as
they are made to pay for the medical bills for the sick. On the other hand people with higher
earning are taxed highly for medical insurance which they may never use if they will never get

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illness. However, it should be noted that insurance is meant to spread the risks and get covered
whenever calamities arises and its benefit is realized when illness arrives. Both the private and
public healthcare insurance have their couple of advantages and disadvantages as discussed in
the paper and should be put into consideration when choosing which cover to take.

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