| Australia's current health care system comprises of | | | | Medicare Levy Surcharge. To be exempt from the |
| both public and private institutions, where private health | | | | surcharge, Australians earning over the income |
| insurers and Medicare work together to provide | | | | thresholds must have hospital cover with a registered |
| affordable health care services for all Australians. | | | | health fund; this does not include Extras only or |
| Although Medicare is the basis of public health care, it | | | | ancillary policies. Thus you must take out a private |
| is never meant to be a standalone scheme. This is | | | | health insurance package that covers fees and |
| why the Federal Government provides incentives and | | | | charges for a hospital stay to be exempt. |
| surcharges to encourage Australians to take out | | | | |
| private health insurance and reduce the demand on | | | | Another initiative designed by the Government is |
| our public health system. | | | | Lifetime Health Cover (LHC). This program promotes |
| The Australian Government has designed the following | | | | taking out insurance earlier in life by applying a loading |
| incentive programs: | | | | (an additional percentage on the cost or premiums) for |
| - Federal Government 30% Rebate Private Health | | | | hospital cover every year after age 30. For individuals |
| Insurance | | | | who do not have hospital cover on the 1st of July |
| - Medical Levy Surcharge | | | | following their 31st birthday and decide to take out |
| - Lifetime Health Cover | | | | hospital cover late in life, they will be required to pay a |
| | | | | 2% loading on top of the premium for every year they |
| The first initiative rewards Australians for taking out | | | | have waited over the age of 30. For example if you |
| health insurance in the form of a rebate. Under the | | | | wait until you are 35 years old, you will need to pay an |
| Federal Government 30% Rebate Private Health | | | | additional 10% on your premium; if you wait until you |
| Insurance scheme, the Government will give back at | | | | are 40 years old, you will need to pay an additional |
| least 30 cents for every dollar contributed to your | | | | 20% and so on. The maximum loading that may be |
| private health premium. The rebate applies to both | | | | applied is 70%. Therefore, in order to pay a lower cost |
| hospital and Extras policies, provided the health | | | | for health insurance, Australians should take out their |
| insurance company is a registered health fund. In other | | | | hospital cover before 1st July after their 31st birthday. |
| words, any Australian who is eligible for Medicare and | | | | Individuals with hospital cover before 30 will pay less |
| is a member of registered health fund, is able to | | | | for their premiums than those who take out health |
| receive a minimum of 30% rebate on their health | | | | insurance later in life. Further to this, once an individual |
| insurance costs. This ensures that Australians who | | | | has paid the LHC loading for 10 continuous years, the |
| have health insurance are rewarded for utilising the | | | | loading will be removed as long as the individual keeps |
| private health system, reducing the strain on Medicare. | | | | their hospital cover. This feature rewards Australians |
| In addition to this, a Medicare Levy Surcharge is applied | | | | who retain their cover for over 10 years, thus helping |
| to Australian tax payers who earn above $77,000 and | | | | to sustain Australian's health care system. |
| do not have hospital cover from a private health | | | | |
| insurer. These individuals are required to pay a | | | | These key initiatives were designed to protect |
| surcharge of 1% of their taxable income on top of the | | | | Australia's health care system. The Federal |
| Medicare Levy of 1.5%, which is paid by most | | | | Government introduced these programs to ensure that |
| Australians. Therefore individuals who earn above the | | | | all Australians have access to quality and affordable |
| threshold and who do not use the private health | | | | health care services. With the aging population, the |
| system are taxed an additional 1% of their income. For | | | | increase in cost for medical and general treatments as |
| couples or families, the income threshold is a combined | | | | well as medical advancements, the demands on the |
| taxable income of greater than $154,000. Again, | | | | public health system continues to increase, thus |
| couples and families above this threshold who do not | | | | requiring a push for Australians to use the private |
| have private hospital cover are required to pay the | | | | health system. |