The New "We Don't Care" Health Insurance Program


The Universal Health Care System in Australia.

The Australian health care system provides universal access to a comprehensive range of services, largely publicly funded through general taxation. Medicare was introduced in 1984 and covers universal access to free treatment in public hospitals and subsidies for medical services; Medicare is now sometimes used to describe the Australian health care system though precisely it refers to access to hospitals (hospital Medicare) and medical care (medical Medicare). Health indicators are strong, for example Australian life expectancy is the third longest in the OECD. Nonetheless, there are concerns in common with many developed countries, such as the ageing of the population, rising levels of obesity, the prevalence of mental illness, and the burden of chronic disease. There is a dramatic gap in the health indicators for the indigenous population compared to non-indigenous Australians. Health care expenditure represents approximately 9% GDP, close to the OECD median but much less than the US.

Australia has a federal system of government, with a national (Commonwealth) government and six States and two Territories. At Federation, health remained the responsibility of the States. However, the Commonwealth Government holds the greatest power to raise revenue, so States rely on financial transfers from the Commonwealth to support their health systems. This makes the Australian health care system a complex division of responsibilities and roles across levels of government. It is also marked by a complex interplay of the public and private sectors. The system is financed largely through general taxation. Although there is a specific income tax levy (the Medicare levy), it raises a small portion of total finance. There is also a high reliance on out of pocket payments, at 17% of total expenditure. Government dominates funding, with 43% of total expenditure provided through the Commonwealth, and 25% through other levels of government. This gives the Commonwealth the dominant role in policy making.

The three major components of Medicare cover public hospitals, medical services, and pharmaceuticals. There is a strong and growing private hospital sector. There is government support (subsidies) for private health insurance which covers both hospital inpatient treatment and out of hospital services not covered by Medicare.

Public hospitals are owned and operated by the State and Territory Governments which also deliver a variety of mental health, dental, health promotion, school health and community health programs. Under funding agreements with the Commonwealth, all Australians are entitled to free treatment as a public patient in a public hospital. Public hospitals can also admit private patients, who may face a range of out-of-pocket charges. Private patients have choice of doctor, ie the patient selects the doctor who is responsible for their care while the public patient has a treating doctor assigned by the hospital. In practice, these are the same doctors but the doctor charges the private patient directly for their medical care. In general, emergency departments are in public hospitals while teaching, education, and research are found in the larger public hospitals which also tend to a treat a more complex case-mix.

The private hospital sector is growing in size and complexity. There is an increasing presence of for-profit firms operating several hospitals. There is a strong focus on elective surgery, and many day only facilities are private. Private patients benefit from subsidized insurance (if insured), and the Medicare subsidies for medical services in hospital.

Most medical practitioners are in private medical practice with fee for service payments. The Medical Benefits Schedule (MBS) sets a fee for each item or service covered by Medicare, for which the Government pays a fixed rebate. New items added to the MBS are generally assessed for safety, effectiveness and cost-effectiveness, and recommendations for public funding are made by an independent committee. The MBS covers all out of hospital medical services, and in-hospital medical services for private patients. However, medical practitioners are free to set their own fees above the MBS fee, thus exposing patient to out-of-pocket charges. Overall, around 70% of all medical services are bulk billed (direct billed to Medicare) in which case there is no out of pocket fee; bulk billing rates are over 80% for primary care attendances, and vary by specialty with . The out-of-pocket charges for out of hospital services cannot be covered by private insurance, and recent changes have introduced the Extended Medicare Safety Net to provide some protection against high levels of private expenses (though some services, such as cosmetic surgery, are excluded). There is a strong primary medical care sector, and general practitioners (primary care doctors) play a gate keeping role, i.e. specialist treatment will be covered by Medicare only with a referral from a general practitioner. There is free choice of provider, with no enrollment or restrictions. Until recently MBS payments were limited to services delivered by medical practitioners but they are now also available in defined circumstances to patients who use practice-based nursing, psychology, dental and other allied health services. Generally such services must be delivered as part of a planned program of care, and specifically requested by the patient’s physician, before a benefit can be paid.

The Pharmaceutical Benefits Scheme (PBS) provides subsidized drugs at a set co-payment (at a lower level for welfare recipients). It was established more than 50 years ago and now covers about 600 drugs in over 1,500 formulations. This comprises over 90% of all prescriptions written in Australia. Patients therefore pay the set co-payment regardless of the cost of the drug they receive. There are safety net provisions in place to limit total expenditure. There is direct negotiation on price between the Government and the pharmaceutical company. All new items added to the PBS must be recommended for listing by an independent committee, the Pharmaceutical Benefits Advisory Committee (PBAC), based on an assessment of safety, effectiveness and cost-effectiveness. Australia was the first country to introduce a mandatory requirement for comparative effectiveness and economic evaluation.

Private health insurance funds (and there are many in Australia though the bulk of the market is covered by 4 funds) is highly regulated. Insurance can cover private treatment in hospital (duplicating the public coverage) and out of hospital services not covered by Medicare, for which the majority of services are dental care and physiotherapy. Since 1996, there have been incentives to encourage the purchase of insurance, often described as ‘carrots and sticks’. The carrots comprise a 30% rebate on private insurance premiums, effectively reducing the cost. The sticks are an income tax surcharge for higher income earners without private cover. Since 2000, there has been a financial incentive to purchase insurance by the age of 30 and to stay with cover. This is Lifetime Health Cover, an age related premium based on the number of years after 30 without private insurance. Other than that, premiums are community rated. From July 1, 2012, access to the rebate has been means tested, with the full 30% applying only to individuals with an annual income less $84,000 and families less than $168,000.

The improvement of information technology as means of supporting better communication and co-ordination of care has been widely accepted. There has been a Practice Incentives Program for primary care physicians to adopt IT strategies. Current efforts are focused on the implementation of a Personally Controlled Electronic Health Record and are auspice under the National E-Health Transition Authority.


@buyinghouse What is your point about Australia?


Good healthcare?

Whereas this dump of Trumpcare what?


What makes you think Australia’s is good?


Huh? Stop asking questions, stop being republican for a minute or two, and elaborate on the tragedy of that crappy Trumpcare.

Didn’t you read the post above? The famous healthcare aka Trumpcare is not even favored by the house or reps, republican majority. Duh!

Or, perhaps knowing 23 million Americans according to the CBO report will be kicked out of the next round of believe it or not Ripley’s bullchit better healthcare program?

Being redundant, perhaps knowing that when you get sick, you just go to the hospital, get cured, and go home without giving the deed to your house to the hospital?

Maybe just those 2 ideas?


Well, Trumpcare hasn’t passed. If you think Obamacare is great, shouldn’t you be glad that it won’t pass?

I’m not worried about the cost of going to the hospital. I know what my out-of-pocket max is, and it’s far lower than what’s offered with Obamacare plans.


The CBO has now scored the new plan and like the last one is saves over 100 billion a year. The claim is that 23 million will lose insurance over 10 years but many of those 23 million supposedly uninsured have plans now with deductibles they can’t afford?. Again, like the last one, a tiny cohort right about to become eligible for Medicare sees their bill rise and nearly everyone else comes out ahead. Sounds good to me. Those last few can just work a little longer. And how And with over 100 billion a year extra subsidizing the current system, where else would the infrastructure money come form?

  • from an over 50 who’s plan was downgraded to a crap one by ACA and who’s monthly premiums rose from $220 to $495 as of this year (even higher next). They were going up 5-7% a year prior to ACA.


So, why don’t we go to the point of this topic, shall we?

The theory was that Trumpcare would be cheaper and would include all Americans and preexisting conditions wouldn’t be touched. Cheaper and better! Those were the promises. Period!

Anything else? It won’t pass legislation. So much for the 30 days. Or next day. Or cheaper, or blah, blah, blah.

Just another lie.

Next? The wall. :stuck_out_tongue_winking_eye:


Obama promised that ACA would lower the average family’s premiums by $2,400/yr. Premiums skyrocketed and are going up by 25%+ a year. If we do nothing, then premiums will continue to increase by insane amounts.

I think people with pre-existing conditions could be better off under “Trumpcare”. If you actually read what’s in it.


The bulk of Obamacare is the Medicaid expansion. That’s where you see most of the uninsured -> insured conversion. I don’t get why people are so fixated on saving 100B in 10 years. If we are so hurt for money stop buying fighter jets which costs 100M a pop and another 10s of millions in service cost. We have a 18.5T economy if we can’t afford health care for our citizens nobody should be able to.

And yet you look around the world pretty much every advanced nation has single payer, including countries like Singapore and South Korea which were 3rd world two generations ago.

Just like for a person, if you stop eating you can save money. But is that the purpose of life? To not living?


Other countries are MUCH healthier than the US. They have lower rates of obesity, diabetes, high blood pressure, cancer, arthritis, etc. Over 50% of our spending is on the sickest 5% of the population. 80% of spending is chronic disease which is largely preventable. We are consuming 80% of prescription drugs in the world. Clearly, we are popping way more pills per capita than any developed country.

I think every other developed country with single payer is going to hit a tipping point. They’ll hit the point where the taxes don’t cover the healthcare bills. Healthcare costs are growing faster than inflation in almost every single developed country. That’s not sustainable.

That’s not even getting into the differences in taxes. Countries with single payer actually pay the tax rates you see. They don’t get all the deductions we do in America. They don’t have 42% of their population paying zero income taxes. Almost everyone is paying 25%+ income tax rates. So go ahead and tell the entire middle class their tax bill is going to sky rocket, so they can have “free” healthcare. See how excited they get. It won’t happen, since the current system is better for the bulk of the middle class who get insurance from their employer. Older people have medicare and the poor have medicaid. Those 3 cover everyone except for 7% that buy their own plan, and the people that don’t have coverage.


But American health cost is spiraling out of control. Much of our health care costs is paid for by employers, which is the same as saying paid for by employees in the form of lower wages. Government programs like Medicare cares about costs and in turn is much more efficient that our so-called private market.

The biggest factor in our runaway health costs comes from a quirk in our tax code. If employers buy insurance for their workers, it’s tax free. If workers buy it themselves, it’s taxed. So we have a system where health costs is twice removed from consumers. Not only do we not pay the doctors ourselves. Insurance companies pay. But we don’t even pay the insurance premium! Our employers pay.

So our private market is in name only. We have short circuited all the pricing signal from the end consumers. It turns into a free-for-all. It’s not free of course. And like Warren Buffett said, it has turned into a tapeworm of American productivity.


You think converting to single payer which further hides the cost from the consumer would help? Over 90% of the public couldn’t tell you how much they paid in income taxes last year or what their effective tax rate was. They’ll tell you what their refund was though.

I’d rather see us go even more private. Just look at the cost of elective procedures. The costs are flat or down from 2-3 decades ago, and the procedures are improved. Each generation of Lasik is better and cheaper. Breast implants are better and cheaper. Stem cell is dramatically cheaper than a decade ago.

In 2013, before ACA took effect, the average family premium was $426/mo. Now it’s $1,021/mo. That’s 139% increase in 4 years which adds up to $7,140/yr more when we were promised a $2,400/yr decrease. The link below has the average per year. You can see the annual increases went up after ACA.


Lasik is a standardized procedure. Most importantly people pay for it out of their own pockets. So the normal price signal of a private market works.

If the GOP is serious about reforming health care, a good place to start is fixing this tax quirk. Either tax employers when they buy health insurance for employees, or allow everybody buy insurance with pre-tax money. But then you still have an awkward system that ties health benefits to a job.

ACA is by no means perfect. It was a decent start given the political reality at the time. Premium rose partly because GOP blocked measures to give more subsidy.

In any case, a better way to look at health care costs is the total costs to our society. Who pays how much is secondary. Cost is also more than just cold hard cash. An unhealthy citizenry is also a cost.


In other countries, with better and cheaper healthcare, the existence of these book keeper type of insurance carriers are almost non existent. They don’t provide nothing tangible. The classic scalper selling you an expensive ticket at your favorite singer’s tour.

The Australians then, have real hospitals where people go to be taken care of. Gee! If in my former country that was a thing of the future many years ago, imagine the US has been behind all this life improvement for all. Cuba is one notch below? Really?

This is a part of the report on Australia:

Public hospitals are owned and operated by the State and Territory Governments which also deliver a variety of mental health, dental, health promotion, school health and community health programs. Under funding agreements with the Commonwealth, all Australians are entitled to free treatment as a public patient in a public hospital. Public hospitals can also admit private patients, who may face a range of out-of-pocket charges. Private patients have choice of doctor, ie the patient selects the doctor who is responsible for their care while the public patient has a treating doctor assigned by the hospital. In practice, these are the same doctors but the doctor charges the private patient directly for their medical care. In general, emergency departments are in public hospitals while teaching, education, and research are found in the larger public hospitals which also tend to a treat a more complex case-mix.

Yes, the government get to build hospitals everywhere. Meanwhile, we are building or built for many years military outposts everywhere. What are we protecting with that? Sick people?


Premiums should be pre tax money for everyone. That way it’s equal.

I think part of the issue is healthcare vs health insurance. I think spending would be far less if we had insurance to cover catastrophic events. Then routine care was covered out of pocket. Consumers would be price sensisitve, because they’d pay directly. We’d be able to comparison shop. It’d force prices to be flat or decrease the way they have for elective procedures. Plus, people would have a direct incentive to be healthier.

@buyinghouse The US has plenty of hospitals. People can go and get care. They can’t refuse service. Your beloved Australia is changing to more of a US model. More and more people are buying private insurance. The government is fining people with higher incomes that don’t buy private insurance. That sounds a whole lot like the US system. If we put eveeryine without insurance in Medicaid, then the systems would be almost identical.

I’m also not sure how you define better. If you talk to people that have lived in countries with single payer, they say the US has better access to care and better care. Their employer plan is better than single payer.


I don’t know how to put it to you. You generalize saying “people that have lived in countries with single player, they say, etc” as an explanation of what’s wrong with them. Well, I have been told by people coming from their too that they are so happy to not worry about copayments and being BK by a visit to the hospital. There’s private hospitals and doctors as in any other country in the world. Access to care and whatnot is better over there because as I said people visiting a doctor don’t have to sign the deed of their properties to the hospital aka insurer.

I bet everybody, yes, everybody has to chip in for the cost of insurance for everybody and yes, the premiums are according to your tax level. It is a mandate, like anywhere else.

I will put myself as an example. I, as a government employee had to pay $X every month, deducted from my check. For that money I had a hospital only for the working class on almost every big city. I just had to show up, be taken care of, and say goodbye. No cost for anything. Last time I visited one, I had a bump above my left eye. They opened it via surgery, and that’s it. No give me this, no give me that. Here! My goodness! It would be $5K to $10K at least.

I also had the privilege of going to a private clinic but why if we had a national hospital everywhere. I would show up, of course, same as it happens here in Kaiser, wait 2-3 hours at the emergency room, and the disclaimer was that urgent, really bad situations would take priority. For those showing up for showing up, long waiting hours.
That’s how you weed out the people who go to see a doctor because they felt dizzy after making a wheelbarrow or whatever.
On one occasion, I woke up in the middle of the night with a pain on the lower left side of my back. I was advised by a friend that it was the kidney stones, and a cry baby as I was when I was 22 years old I went to the national hospital emergency. I was moaning like a lady in labor. I was crying of so much pain, that if it wasn’t for a friend of mine doing his internship there giving me some morphine, I would have pooped and peed my pants because before me there were broken legs, people cut during a machete fight (yummy!) and other really, really grave cases.

If third world countries can do it, why not the US?

Get the insurers out of Washington, you will see it can be done.


So you think cheaper is better? With that logic, you should buy the cheapest of everything. It’s the best.


The employer sponsored health care is good. It should be, because the cost is astronomical. End consumers are shielded from the costs, have no idea how much anything is and frankly don’t care. That’s the core problem of runaway health costs.


Isn’t single payer those problems on steroids though? People don’t even know how much they pay in taxes or their effective tax rate. They’d really have no clue how much of their taxes goes for healthcare. The only way it could lower spending as a percent of GDP is if medical care professionals take huge pay cuts, or we ration care. Neither of those lead to better healthcare.