Private Health insurance is insurance against the risk of incurring medical expenses among individuals.
An insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is available to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organisation such as a government agency or private business.
Insurance organisations are regulated by the
Federal Government to ensure affordable access to private health insurance for
all through the principle of community rating. Pursuant to this principle, the
insurance premium is the same regardless of the health status or claims history
of a member or new member.
The public health system is called Medicare. It ensures access to hospital treatment and subsidised out-of-hospital medical treatment. It is funded by a 1.5% tax levy on all taxpayers, an extra 1% levy on high income earners, as well as general revenue.
The private health system is funded by a number of insurance organisations. The largest of these is Medicare Private, which is government-owned, but operates as a government business enterprise under the same regulatory regime as all other registered private health funds.
At the start of April each year, health insurance funds are normally granted permission to alter their premiums. Such changes are generally required by health funds to cover the growing cost of services and claims, and increases in the cost of medical treatment brought about by rapid improvements in technology.
It's important that consumers understand the average premium increase percentage (5.60%) announced by the Federal Health Minister on 8 February 2013 is only an average, and that the actual percentage change for their own policy can vary.
Did you know over the past 3 years, premiums have increased by an average of 16% in total.