Private Health insurance in Australia

Private health insurance in Australia and New Zealand.

EFFECTS OR ADVANTAGES OF INCREASED LEVEL OF PHI

According to Quicken (2003) there will be:

Less waiting time for elective surgeries.
Facilities like a TV or phone in hospitals can be provided.
People can afford choose the doctor of there choice.
Patients can be treated in a private ward.
Some funds also cover you as a ‘private patient in a public hospital’. This means that you can choose your own doctor, but otherwise the treatment you receive will be same as, if you were a public patient.

Certain types of people may benefit more from private health cover than others like:

Those who generally remain unhealthy or predisposed to illness should consider private cover.
People who are starting a new family, because young children have more health problems then adults.
People, who are involved in hi-risk activity like, jumpers and rock climbers, might feel more comfortable with private cover.
Age – as age increases there are greater chances that people often become ill.
People who are playing sports are also at high risk of injury (Quicken, 2003).

PITFALLS/DISADVANTAGE

· There are certain disadvantages of this system because health insurance is expensive and it will cost a couple without children around $2,500 per annum despite of deduction of 30 per cent government rebate. And for the maximum cover, a couple could expect to pay about $4,170 per annum after the subsidy, or nearly $6,000 without it. This is a definitely a expensive for most people's household budget, and most people cannot afford it. (Kinna, 2003).

With this system anyone who regularly claims more than the cost of their contributions is likely to stay with private health insurance. People who pay more than they claim will continue to re-evaluate their membership. If the cost is regularly more than the return, people will opt out (Kinna, 2003).

· Under Medicare system only three per cent of the dollar is spent on administration and 97 per cent on health care, where as in private health insurance system 14 per cent goes on administrative costs to check all those claims, and another 25 per cent goes to the shareholders, leaving only around 60 per cent for health care (Cost, 2003).

Private Health Insurance in Other Countries

Pakistan

In countries like Pakistan private health insurance is working very differently. In Pakistan there is no government funded insurance system as in Australia like Medicare and other private agencies (Makinen, 1993). Government provide only fixed amount of money called as a medical allowance to only those people who are government employee, not to each and everyone.
This fixed amount is part of there salaries which they get at the end of month, irrespective of whether u get ill or not. This amount is usually small and if any one gets ill unfortunately he has to beer out of pocket expenses.
According to Makinen (1993) private health insurance industry is working in Pakistan, but differently as compared to Australia. PHI industry provide this facility to private firms and companies and these companies then provide this facility to there employees and cover there all expenses if they get ill, though these companies are only few in number.
In Pakistan government is not supporting PHI industry like Australia, government don’t offer rebates and other things. Currently people who get private health insurance cover have to pay by him.
The reason why PHI industry is unable to work efficiently there is because current private health insurance programs are plagued by cost escalation, fraud, and abuse. People often don’t get ill but they charge insurance companies for that, with the help of fake medical certificates.
For people who are neither government employee nor of private companies has to go government hospitals for seeking medical care, but government doesn’t provide all benefits like medicine and surgical stuff, and patient has to pay this from his pocket above all medical care provided in government hospitals is also not satisfactory.

New Zealand

In New Zealand private medical insurance was covering only surgical treatment, until the more recent involvement of physician proceduralist like gastroenterologist and cardiologist (Bloom, 2000) Benefits for patients seeking psychiatric and medical care are strictly limited.
The traditional PHI policy in New Zealand has provided part or a surgeon’s entire fee and the inpatient hospital fees associated with surgery.
Bloom (2000) states that in mid 1980 PHI in New Zealand covered around 40 percent of the population, but by 1998 it fell to only 25 percent, mostly due to same reasons as in Australia.
Government in 80s removed tax deductibility on PHI, which resulted in rise in premiums which supported directly to old people with surgical need. This resulted in vicious circle because more health policy holders relinquished there coverage, premiums increased to higher average cost of health care users who remain insured.
Since 1990 private health insurers in New Zealand have become increasingly aggressive in applying other mechanisms to manage use of health services. Insurers are more keen then there Australian counterparts in applying strategies which are prevalent in USA, such as managed care.
In 1993 government tried to introduce scheme with establishment of privately managed health plans, with partial payment of insurance premiums by government supplied voucher. This scheme was abandoned, but it is still favored by some conservative politician in New Zealand.

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