Australian Institute Of Health And Welfare

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Like many healthcare systems around the world, Australia has a complex system in place for the funding healthcare to meet the needs of its citizens. According to the Australian Institute of Health and Welfare (AIHW), in 2011-12 Australia spent an estimated $140.2 billion on healthcare, accounting for approximately 9.5% of the gross domestic product (AIHW, 2014). Australia has seen substantial growth in the cost of healthcare over the last decade due to an aging population, increased prevalence of chorionic conditions, changes in personal incomes, technology, and other economic trends (AIHW, 2014). Government sources account for the bulk of all healthcare funding, with the Australian Government contributing 42.4%, and state and territory…show more content…
In order to fund the Medicare program, the Australian Government leverages a mixture of funding sources such as a general tax revenue, patient payments, state level funding, and other private sources. According to The Commonwealth Fund, the Australian Government funds 43% of all expenditure, with other levels of government contributing 25%, out-of-pocket payments contributing 17%, and the remaining 15% coming from private sources such as private healthcare coverage (2015). In order for the Australian Government to subsidize such a healthcare program, residents of Australia bear a 2% Medicare levy of their taxable income (Australian Tax Office, 2015). According to Australia’s Private Health Insurance Ombudsman (PHIO), in order to alleviate some of the burden on the Australian Government, the Medicare Levy Surcharge is applied to payers who do not have private hospital coverage and earn above a certain income level (PHIO, n.d.). The Medical Levy Surcharge was created to encourage individuals to use the private healthcare system in order to reduce the demand on the public Medicare system. The Medical Levy Surcharge is an income driven fee calculated at a rate of 1.0%-1.5% of an individual’s income level for those earning above a specified income, which is meant in incentivize those with the means to do so to carry private hospital coverage (PHIO, n.d.). Many private coverage options also include coverage for services not
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