Private Health Care
The Australian Government Pushes for Private Health Care
The Australian government has begun encouraging individuals, particularly those over age 31, to take out a private health care policy. The law that specifically relates to this is the Lifetime Health Cover. This law imposes a penalty fee on those that choose not to take out a private health care policy by July 1, after their 31st birthday. For each year that people delay adding private cover the penalty fee will increase by 2% up to a total of 70%. Individuals need to ensure that they secure coverage for themselves on a timely basis to avoid high penalties. This only refers to hospital care, not ancillary coverage.
Another law the government has enacted to encourage private citizens to reduce the burden on the public healthcare system is the Medicare Surcharge Levy. While all tax payers, except those with a low-income card, pay a 1.5% income tax levy for Medicare, those that exceed certain income requirements pay an additional 1%. The reasoning behind this policy is that private citizens are more likely to take out private health coverage when faced with a tax increase. In many cases, the cost of the premium will be less than the cost of the tax. Historically, the government has heavily subsidised private insurance premiums by as much as 40%. Medicare does offer substantial coverage, however the delays on procedures can make adding a private health care cover a practical solution.
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