How Do Health Funds Work?

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#DailyCBDNewzHealth

Australia has one of the best health systems in the world. There are several types of health care providers in the health system, including general practitioners, medical specialists, allied health workers, and nurses. Australians enjoy free or low-cost access to health care services through Medicare and the public hospital system. Many Australians also choose to carry a private health insurance policy for choice outside the public system.

Medicare 101

Medicare is composed of three main parts: medical services, public hospitals, and medicines. Australian and New Zealand citizens, permanent residents in Australia, and those from countries with reciprocal agreements can all access Medicare. It covers all of the medical expenses of public hospital services, as well as some or all of the medical expenses of other health services.

The Medicare Benefits Schedule (MBS) is an up-to-date list of all health services that are subsidized by the government. The MBS ensures Australians pay less for services once they pay a certain amount of out-of-pocket costs. The Pharmaceutical Benefits Scheme (PBS) is a list of brand-name, generic, biologic, and biosimilar medicines and makes them cheaper for patients to purchase.

Medical bills can surprise you at any time. The last thing you want to think about is what would happen if you suffer bodily injury in a car accident. Just like Australians have peace of mind that they can access quality health care at any time, they also have peace of mind when behind the wheel. Car insurance covers all or part of the cost of repairs or replacement and the cost of damages to a third party’s car or property.

There are several types of coverage options drivers can choose from. Determining how much coverage you need depends on your driving habits, needs, budget, lifestyle, and type of car you are insuring. Your car insurance premium depends on how risky of a driver the insurance company deems you. Your zip code, driving record, age, and gender also play a factor. At iSelect, you can compare car insurance quotes from a range of car insurance companies and find the best policy for your needs.

Private Health Insurance

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Many Australians choose to purchase private health insurance so they can be treated as a private patient in the hospital. A private insurance policy also helps cover the costs that Medicare doesn’t. The premium and coverage amount depends on the type of policy you have. Private health insurance covers some or all of the costs of being treated in public or private hospitals as a private patient and your choice of doctor. It also helps with the health services that aren’t covered by Medicare, such as dental and optical. There are some instances where private coverage may help you access hospital services faster.

An attractive advantage for many Australians to purchasing private health insurance is the exception to paying the Medicare Levy Surcharge (MLS). The MLS is a tax of up to 1.5% of your taxable income if you either don’t have private coverage or earn over a certain income level. Another perk of private health insurance is being entitled to a rebate from the government. You qualify for a rebate if you have private health insurance with hospital cover, extras cover, or both, and your income is below a certain limit. The rebate comes in the form of lower insurance premiums or an offset in your annual tax return.

Health Fund Structures

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Australian health funds have either a for-profit or not-for-profit structure. Not-for-profit funds are designed to benefit the members rather than the shareholders. They provide a broader scope of coverage, lower premiums, and better benefits for covered items. Not-for-profit funds are exempt from income tax assessment.

Health insurance, unlike other types of insurance, isn’t risk-rated and doesn’t factor your age, health, and occupation to determine your coverage and premium. Health insurance is community rated, meaning all insured persons pay the same price for a specific policy regardless of their health or preexisting conditions.

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