Health Economics

  • A term used generally to describe publicly funded and provided health care in Australia, Canada and the US. Medicare is the term used in Australia to describe its universal health insurance scheme. Introduced in 1984, it provides access to free treatment in a public hospital and free or subsidized treatment by primary practitioners (specified services only). It is funded through taxes and a special Medicare levy based on taxable income. In Canada, the term is used loosely to describe the provincially provided (but in broad terms federally controlled) systems of public health care insurance, providing free access to hospital and doctors' (specialists and general practitioners) services. It is funded through provincial and federal general taxation with occasional provincial premiums.

    In the United States the term refers explicitly to a federal programme that is the main health insurance programme for people aged 65 and older, the disabled, and people with end-stage renal disease regardless of income. People who qualify for social security benefits are automatically eligible for Medicare. It is funded via payroll taxes and members' payments: premiums, deductibles and coinsurance. Medicare coverage provides for acute hospital care, physician services, brief stays in skilled nursing facilities, short-term skilled home care related to a medical problem and prescription drugs. There are two major programmes: Hospital Insurance (Part A) and Supplementary Medical Insurance (Part B). The Medicare coverage for Part A has no premium and pays 100 per cent of hospital costs for the first 60 days after payment of a deductible (currently about $1086). Medicare Part B pays up to 80 per cent of doctors' bills for a monthly premium of $96.40. Doctors may bill beneficiaries for an additional amount (the 'balance') not to exceed 15 per cent of the Medicare approved charge (See Balance Billing). Medicare currently has about 45 million beneficiaries.