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HMS, HAG EQ-Bank 190

Discuss the advantages and disadvantages of private health insurance for Australia's healthcare system.   (5 marks)

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Advantages of private health insurance:

  • [P] Private health insurance reduces pressure on Australia’s public healthcare system by diverting patients to private facilities.
  • [E] This occurs when insured patients choose private hospitals for elective surgery and specialist treatment rather than using public services.
  • [Ev] Almost half of all Australians have private hospital cover, which helps manage demand on public hospital waiting lists and emergency departments.
  • [L] Therefore, private insurance supports the sustainability of public healthcare by sharing the patient load across both sectors.

However, private insurance creates notable disadvantages:

  • [P] Conversely, private health insurance can increase healthcare inequality between different socioeconomic groups in Australian society.
  • [E] This happens because wealthy Australians can afford comprehensive private cover while lower income groups rely solely on public services.
  • [Ev] Young people, elderly patients and those with limited income have lower rates of private insurance, potentially creating a two-tiered healthcare system.
  • [L] Consequently, private insurance may undermine the equity principles that underpin Australia’s universal healthcare approach through Medicare.
Show Worked Solution

Advantages of private health insurance:

  • [P] Private health insurance reduces pressure on Australia’s public healthcare system by diverting patients to private facilities.
  • [E] This occurs when insured patients choose private hospitals for elective surgery and specialist treatment rather than using public services.
  • [Ev] Almost half of all Australians have private hospital cover, which helps manage demand on public hospital waiting lists and emergency departments.
  • [L] Therefore, private insurance supports the sustainability of public healthcare by sharing the patient load across both sectors.

However, private insurance creates notable disadvantages:

  • [P] Conversely, private health insurance can increase healthcare inequality between different socioeconomic groups in Australian society.
  • [E] This happens because wealthy Australians can afford comprehensive private cover while lower income groups rely solely on public services.
  • [Ev] Young people, elderly patients and those with limited income have lower rates of private insurance, potentially creating a two-tiered healthcare system.
  • [L] Consequently, private insurance may undermine the equity principles that underpin Australia’s universal healthcare approach through Medicare.

HMS, HAG EQ-Bank 189

Explain how government policies encourage Australians to take up private health insurance.   (4 marks)

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  • Government rebates provide financial incentives for private health insurance by reducing premium costs through income-tested rebates.
  • The reason for the Medicare levy surcharge is to encourage higher income earners to purchase private insurance, as those earning above threshold amounts pay additional tax without appropriate hospital cover.
  • This creates financial pressure on wealthy Australians because avoiding the surcharge makes private insurance more cost-effective than paying extra tax.
  • The lifetime health cover incentive ensures people join insurance funds early by offering lower premiums for those maintaining hospital cover from a young age.
  • Consequently, these combined policies result in reduced burden on public hospitals while encouraging Australians to take personal responsibility for their healthcare costs.
Show Worked Solution
  • Government rebates provide financial incentives for private health insurance by reducing premium costs through income-tested rebates.
  • The reason for the Medicare levy surcharge is to encourage higher income earners to purchase private insurance, as those earning above threshold amounts pay additional tax without appropriate hospital cover.
  • This creates financial pressure on wealthy Australians because avoiding the surcharge makes private insurance more cost-effective than paying extra tax.
  • The lifetime health cover incentive ensures people join insurance funds early by offering lower premiums for those maintaining hospital cover from a young age.
  • Consequently, these combined policies result in reduced burden on public hospitals while encouraging Australians to take personal responsibility for their healthcare costs.

HMS, HAG EQ-Bank 188

Describe the main reasons why Australians choose private health insurance.   (3 marks)

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  • Private health insurance provides shorter waiting times for elective surgery and specialist appointments compared to public healthcare services.
  • Patients can choose their preferred doctor and hospital for treatment, offering greater control over their healthcare decisions.
  • Insurance covers ancillary services like dental care, physiotherapy and chiropractic treatment that Medicare does not fund.
  • Private rooms in hospitals provide increased privacy and comfort during treatment and recovery periods.
  • Tax benefits include rebates for insurance premiums and avoiding the Medicare levy surcharge for higher income earners.
Show Worked Solution
  • Private health insurance provides shorter waiting times for elective surgery and specialist appointments compared to public healthcare services.
  • Patients can choose their preferred doctor and hospital for treatment, offering greater control over their healthcare decisions.
  • Insurance covers ancillary services like dental care, physiotherapy and chiropractic treatment that Medicare does not fund.
  • Private rooms in hospitals provide increased privacy and comfort during treatment and recovery periods.
  • Tax benefits include rebates for insurance premiums and avoiding the Medicare levy surcharge for higher income earners.

HMS, HAG 2013 HSC 5 MC

Ancillary cover in private health insurance can assist with which of the following costs?

  1. General practitioner fees
  2. Prescription and other medications
  3. Physiotherapy, dental services and optometry
  4. Treatment as a private patient in either a public or private hospital
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\(C\)

Show Worked Solution
  • C is correct: Ancillary cover specifically includes allied health and dental services.

Other Options:

  • A is incorrect: GP fees covered by Medicare, not ancillary.
  • B is incorrect: Medications covered by PBS, not ancillary insurance.
  • D is incorrect: Hospital treatment covered by hospital cover, not ancillary.

HMS, HAG 2016 HSC 9 MC

In which list are all the factors perceived advantages of choosing private health insurance?

  1. Private room, reduced time on waiting lists, assigned medical practitioners
  2. Choice of doctor, reduced time on waiting lists, access to ancillary services
  3. Private room, decreased cost to the individual, assigned medical practitioners
  4. Choice of doctor, increased cost to the government, access to ancillary services
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\(B\)

Show Worked Solution
  • B is correct: All three factors are genuine advantages of private health insurance.

Other Options:

  • A is incorrect: Medical practitioners are chosen, not assigned in private system.
  • C is incorrect: Private insurance increases costs to individuals, not decreases.
  • D is incorrect: Increased government cost isn’t an advantage to individuals.

HMS, HAG 2021 HSC 8 MC

What could be an advantage for an individual who has private health insurance

  1. The Medicare Safety Net is decreased.
  2. The Medicare Levy Surcharge needs to be paid.
  3. The cost of some ancillary health services is reduced.
  4. The recovery time after elective surgery in a private hospital is decreased.
Show Answers Only

\(C\)

Show Worked Solution
  • C is correct: Private insurance reduces costs for ancillary services such as dental and optical services.

Other Options:

  • A is incorrect: Safety Net provides additional benefits not reductions.
  • B is incorrect: Surcharge avoided with adequate private cover.
  • D is incorrect: Recovery time depends on individual not insurance.

HMS, HAG 2023 HSC 10 MC

Which of the following incentives was introduced by the Australian Government to encourage individuals to take out private health insurance?

  1. Entitlement to a mental health treatment plan
  2. Guaranteed 50% rebate on all ancillary services
  3. Free admission for treatment in private hospitals
  4. Exemption from paying the Medicare levy surcharge
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\(D\)

Show Worked Solution
  • D is correct: Medicare levy surcharge exemption introduced as a financial incentive to encourage private health insurance uptake.

Other Options:

  • A is incorrect: Mental health treatment plans are available through Medicare, not linked to private insurance.
  • B is incorrect: No guarantee of 50% rebate on all ancillary services exists.
  • C is incorrect: Private hospitals still charge for admission despite insurance.

♦♦ Mean mark 45%.

HMS, HAG 2024 HSC 11 MC

Why do private health insurance providers apply waiting periods for certain procedures and services?

  1. To ensure the policy is suitable for the policyholder
  2. To assess the policyholder's capacity to pay premiums
  3. To maximise eligibility of government rebates for consumers
  4. To prevent immediate claims for pre-existing medical conditions
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\(D\)

Show Worked Solution
  • D is correct: Waiting periods implemented primarily to prevent people from joining only when they need treatment for pre-existing conditions.

Other Options:

  • A is incorrect: Suitability is determined by policy features, not waiting periods.
  • B is incorrect: This is determined during application, not waiting periods.
  • C is incorrect: Rebates aren’t affected by waiting periods.

♦♦ Mean mark 40%.

HMS, HAG EQ-Bank 3 MC

A pensioner visits their local pharmacy to collect their regular blood pressure medication. They are able to purchase their prescription medications at a significantly reduced cost compared to the general public.

Which of the following enables this person to access cheaper prescription medications?

  1. Medicare Safety Net
  2. Hospital cover
  3. Health care concession card
  4. Private health insurance
Show Answers Only

\(C\)

Show Worked Solution
  • C is correct: Health care concession cards provide reduced PBS medication costs for pensioners.

Other Options:

  • A is incorrect: Medicare Safety Net operates on annual thresholds not individual prescriptions.
  • B is incorrect: Hospital cover relates to private hospital treatment not medications.
  • D is incorrect: Private health insurance doesn’t reduce PBS prescription costs.

HMS, HAG EQ-Bank 2 MC

A 19-year-old person with a permanent physical disability received funding for mobility equipment, home modifications, and regular physiotherapy sessions. They were able to choose their own service providers and had control over how their support funding was managed.

Which of the following schemes provided this person-centred support?

  1. Medicare Benefits Schedule
  2. National Disability Insurance Scheme
  3. Private health insurance
  4. Community health services
Show Answers Only

\(B\)

Show Worked Solution
  • B is correct: NDIS provides person-centred disability support with participant choice and control.

Other Options:

  • A is incorrect: Medicare covers medical services not disability equipment/modifications.
  • C is incorrect: Private insurance doesn’t provide comprehensive disability support funding.
  • D is incorrect: Community services don’t provide individual funding control mechanisms.

HMS, HAG EQ-Bank 1 MC

A low-income family had multiple medical appointments with specialists over a three-month period, resulting in high out-of-pocket expenses. After reaching a certain threshold, their out-of-pocket medical costs were significantly reduced for the remainder of the calendar year.

Which of the following enabled this reduction in medical costs?

  1. Medicare Safety Net
  2. Private health insurance
  3. Health care concession card
  4. Bulk billing incentive
Show Answers Only

\(A\)

Show Worked Solution
  • A is correct: Medicare Safety Net reduces costs after reaching annual threshold.

Other Options:

  • B is incorrect: Private insurance doesn’t use annual threshold system.
  • C is incorrect: Concession cards provide discounts not threshold-based reductions.
  • D is incorrect: Bulk billing eliminates gaps not threshold-based cost reduction.