phi Flashcards
(15 cards)
what is private health insurance
private health insurance is optional coverage individuals can purchase in addition to Medicare, offering access to private hospitals and additional health services not fully covered by Medicare.
Members pay a premium in return for payment towards health-related costs not covered by Medicare
premium
the amount paid for insurance
what phi covers
- private hospital treatment
- choice of doctor in hospital
- detal care
- physiotherapy
the gap
private hospitals usually charge more than the scheduled fee for services. Generally, phi companies pay the additional costs, but sometimes the total bill may exceed the amount contributed by the insurance company
in these cases, the patient has to pay the rest (the gap)
phi rebate
policyholders receive a 30% rebate on their premiums for private health insurance
this is income tested
eligible policyholders aged between 65 and 70 receive approximately 4% extra, and those over 70 approximately 8%
eligible policyholders can opt to pay a reduced premium or pay the total and reclaim the rebate in their tax return
medicare levy surcharge
eligible taxpayers who do not take out private health insurance will have to pay an additional 1-1.5%
this encourages high income earners to take out phi
lifetime health cover
people to take up phi after 31 pay an extra 2% on their premiums for every year they are over 30.
this encourages young people to take out phi and keep it for life
once taken out, if an individual holds phi for 10 years, the loading is removed and the individual will pay the same amount as someone who took out the insurance at age 30
incentives
- private health insurance rebate
- medicare levy surcharge
- lifetime health cover
- age-based discount
age-based discount
insurers have the option of offering young people aged 18-29, a discount of up to 10% for hospital cover. The discount allows for a 2% reduction in premiums for each year the person is under 30, to a maximum of 10%
advantages of phi
- enables access to private hospital care
- allows for choice of doctor while in public or private hospitals
- shorter waiting times for some elective surgeries
- helps to keep medicare sustainable
disadvantages of phi
- costly premiums that have to be paid
- still out of pocket costs, although subsidised
- policies can be complex to understand
- qualifying periods apply for some conditions
access
by taking out phi, individuals will be met with shorter waiting times
this is due to the extra cost that private hospitals charge, meaning that generally only people with phi can use them
this leads to shorter waiting times for elective procedures
this allows more people to access the private hospital system
funding
phi is funded through the government, and the premium that policyholders pay
it allows individuals the opportunity to access more services not covered by Medicare for a subsidised cost
equity
the phi rebate is income tested, meaning that those who earn less can get a larger refund, making phi more affordable
different premium plans are available for different people with different incomes, focusing on different people and their personal needs
sustainability
phi promotes the sustainability of the public health system, as it alleviates the pressure form the system by giving people access to private hospital services, meaning there are shorter waiting periods for public healthcare services
premiums rise with inflation and vary with the type of insurance plan - to ensure it remains sustainable
