One of the biggest obstacles to creating a universal health care program in the United States that's frequently cited is the sheer size of the population. It's also difficult to create a system that accommodates both major metropolitan areas and isolated rural communities.
However, there's one country that can act as a model for a health care system that covers everyone while covering a lot of real estate – Australia, which offers its Medicare national public health insurance to all Australian citizens and even visitors from countries with reciprocal health care arrangements.
Australian Medicare is not restricted to citizens of a certain age; it's available to all nationals and permanent residents. The program covers most medical services and prescription pharmaceuticals as well as some optometry services, and citizens obtain private insurance for dental and other specialized healthcare services. About half of Australia's population has contracted for additional coverage through private insurance, which gives them access to private hospitals as well as coverage for specialty and sometimes dental care.
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This mix of private and public insurance has resulted in a system that contains both private and public hospitals with few integrated delivery systems; most physicians in Australia practice privately and work on a fee-for-service basis, which provides a strong contrast to our increasingly integrated health care system that has relied on fee-for-service payments for decades. Australian physicians who work in public hospitals typically are paid a salary or offered a fee for each service they perform, while most physicians who work in hospitals are also in private practice.
The Australian government encourages the purchase of private insurance policies by providing tax breaks and subsidies for policyholders; in this regard, it's somewhat similar to the system enacted by the Patient Protection and Affordable Care Act , but there are few additional similarities between the systems.
While the programs created in the United States to take care of the lowest-income portion of the population – Medicare for adults older than 65, and Medicaid for children and younger adults – pay for the total cost of care for enrolled patients and are instrumental in setting doctors' fees for the rest of the health care system, doctors' fees in Australia aren't regulated, and public insurance typically covers between 85 percent and 100 percent of the total cost of care.
"In Australia, you aren't assessed a financial penalty if you choose to forego health insurance," notes David Dragoo, MD, a health expert at Money Crashers who's established professional connections with several Australian physicians through his network. "In Australia, providers are also allowed to restrict coverage to those with pre-existing coverage, something [PPACA] has eliminated. And the Australian system also has measures in place to encourage hospitals to provide high-quality care, as does PPACA."
General practice physicians in Australia also act as gatekeepers to specialty care, as Medicare will not reimburse specialists without a referral. Public hospitals are funded both by the federal government and by state and territory governments; public hospitals also receive additional funding by treating some private patients, too. Most of the federal funds come from income taxes levied on Australians, although some low-income citizens are exempt from the tax while individuals and families with higher incomes without private hospital insurance must pay an additional income-based surcharge. In this way, the Australian government encourages those who can afford private insurance to buy additional policies rather than accepting the additional surcharge.
A portion of private insurance policy premiums are paid for by the Australian government through a tax rebate. There are also financial incentives to purchasing private policies (also known as health funds) as early in life as possible; Australians can buy lifetime health coverage from health funds, and the sooner they pick up those policies, the better their premiums. For example, premiums increase by 2 percent for each year past the age of 30 that a potential enrollee has allowed to lapse before purchasing a policy, regardless of what their health status is. In this way, the Australian health care system encourages citizens to purchase a private policy and maintain that policy before they reach 30.
But although the mix of private and public health insurance works well for a country the size of Australia, problems remain.
"It's pretty well-known that there is a shortage of hospital beds in Australia," notes Dragoo, adding this issue could become a reality in the United States with so many newly insured citizens.
Still, Australia has managed to keep its health care costs down while they continue to climb in the United States. And the expansive access to health care that's available to Australians showcases how a blend of private and public insurance policies can be leveraged to create universal coverage for a large country like the United States.
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