Health Insurance 101: The benefits of a healthy public and private healthcare system


Our new video series, Health Insurance 101, aims to answer some of our customers’ most common questions. First up is how Australia’s health system works, and the role private health insurance plays within it.

Australia’s healthcare system is the envy of many countries around the world. To keep it this way, our public and private systems work together to ensure affordable and accessible healthcare for all.

Let’s start with Medicare…

All Australians have access to the same essential medical care thanks to our universal healthcare scheme, Medicare.

Medicare pays for public hospital services including essential surgeries and medicines, while also supporting the private health system. It also subsidises GP appointments and the Pharmaceutical Benefits Scheme (PBS) which helps to makes many medicines affordable.

And it’s paid for through our taxes in the form of a Medicare Levy – for the majority of people, 2% of their annual income. Those earning more than $90,000 a year, or couples and families earning more than $180,000 a year, without private hospital cover, also pay a Medicare Levy Surcharge (MLS)(an additional 1.0-1.5% depending on your income). Understanding the tax implications of private health and MLS can be confusing, so we’ve pulled together some tips to help navigate your way through it.

If we have a universal healthcare scheme, why would I need private health insurance?

While Medicare is the centrepiece to our world class healthcare system, and covers most Australians for primary healthcare, it doesn’t cover everything.

Taking out private health insurance offers Australians more choice and control over their healthcare options.

With private hospital cover, customers can avoid long waiting lists for elective surgeries in public hospital. They can also access private hospitals for treatment, choose their own specialist or surgeon, have a greater chance of staying in a private hospital room, and may have the option to receive some treatments like chemotherapy, rehab or dialysis at home.

What role does the private system have in making healthcare accessible and affordable for all?

Currently, private health insurance helps to pay for two out of three non-emergency elective surgeries in Australia. Importantly, this takes pressure off our public system, reducing wait times in public hospitals and freeing up hospital beds for people who really need them.

When people opt out of private health insurance, more people are forced into the already overburdened public system, which has the potential to compromise the sustainability of our world-class health system.

A 10 percent drop in private health insurance membership across Australia would mean an additional 1.1 million people become fully dependent on public health system. This could see public hospital waitlists increase by more than 90 percent and it would be likely that taxes and surcharges would need to go up to pay for the additional hospital beds.

For our part, Bupa continues to lobby for customer-focused reforms that will help to ensure our customers receive affordable and personalised healthcare and see value in their private health cover.