The Australian Health Care System

During the 1970s and early 1980s, Australian health care was in a state of considerable turbulence. Successive governments tried to create a more equitable health insurance system, while also trying to control spiralling health care costs. The result seemed to emphasize cost cutting, with little regard for the quality of care provided.

Then, in 1984, Australia introduced a twotiered universal health care system called Medicare. Over the last several years, the system has managed to maintain Australia's health care expenses at 8 percent of the country's gross national product. Furthermore, Medicare has gained such widespread support among the Australian people that even the nation's Liberal Party (the Aussie equivalent of the Republican Party) has dropped its opposition to it.

Australian Medicare guarantees health care to every resident

through the country's wellrun public health system. The system is funded through an income tax of 1.2

. . .
ously purchased a supplemental health insurance policy containing hospital coverage. For public patients, the Medicare benefit for hospital services is only 75 percent of the scheduled fee. Patients can insure privately, however, to cover the gap between benefit and fee. In practice though, people who choose to be public patients in public hospitals pay nothing and the hospital receives a capped grant to provide these services. People who choose to be private patients in public hospitals have 75 percent of the schedule fee reimbursed by Medicare and pay any additional fees through their insurance. Since the introduction of Medicare the proportion of the population covered by private insurance has dropped from 62 percent in 1983 to 42 percent in 1992. The largest decrease in the number of persons privately insured has been among young people. A special feature of the Australian system is compulsory community rating. In this, insurers have to pool good and bad risks and charge a standard premium to all subscribers. One of community rating's problems though, is that as younger fitter people have dropped out of the pool, premiums for the privately insured have had to rise dramatically. A benefit of private insurance
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Approximate Word count = 1417
Approximate Pages = 6 (250 words per page)

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