Medicare (Australia)
Medicare is the publicly-funded universal health insurance scheme in Australia. The program is managed by the Department of Health, Disability and Ageing, while Services Australia is responsible for claims processing and registration. The scheme either partially or fully covers the cost of most health care and medical treatments, with services being delivered by state and territory governments or private enterprises. All Australian citizens and permanent residents are eligible to enrol in Medicare, as well as international visitors from 11 countries that have [|reciprocal agreements] for medically necessary treatment.
The Medicare Benefits Schedule lists a standard operating fees for eligible services, called the schedule fee, and the percentage-portion of that fee that Medicare will pay for. When a health service charges only how much Medicare will pay, this is called a "bulk billed" service. Providers can charge more than the schedule fee for services, with patients responsible for the "gap payment". Most health care services are covered by Medicare, including medical imaging and pathology, with the notable exception of dentistry. Allied health services are typically covered depending on meeting certain criteria, such as being related to a chronic disease, and some private hospital costs may be partially covered. Public hospital costs are primarily funded through a different arrangement.
The scheme was created in 1975 by the Whitlam government under the name "Medibank". The Fraser government made significant changes to it from 1976, including its abolition in late 1981. The Hawke government reinstated universal health care in 1984 under the name "Medicare". Medibank continued to exist as a government-owned private health insurer until it was privatised by the Abbott government in 2014.
History
Health insurance prior to Medibank
From early in the European history of Australia, friendly societies provided most health insurance which was widely adopted. The states and territories operated hospitals, asylums and other institutions for sick and disabled people not long after their establishment, replicating the predominant model of treatment in the United Kingdom. These institutions were often large and residential. Many individuals and groups ran private hospitals, both for profit and not-for-profit. These were particularly active in providing maternity care.A royal commission into friendly societies was held in NSW in 1870–74, which was followed by new legislation in 1875.
An 1876 British Empire royal commission into friendly societies considered the establishment of Victorian colony-run health insurance, and decided against it.
Another NSW friendly society royal commission was held in 1882. It found that the welfare of 175,000 people in the colony was insured by the societies.
If a worker was injured at work, there was no statutory requirement for the employer to pay compensation to the injured person. Compensation was only paid if the worker successfully sued their employer for negligence. They were rarely successful. The UK's Employment Liability Act 1880 aimed to improve the workers' success in court, and was enacted in the Australian colonies between 1882 and 1895. The injured workers remained largely unsuccessful.
The South Australian government passed the Workmens’ Compensation Act 1900, and over the next 20 years, the other states and territories followed. These laws required businesses to pay men who were injured while working for them.
The Invalid and Old-Age Pensions Act 1908 provided a pension to people "permanently incapacitated for work" and unable to be supported by their families, providing they also met race and other requirements. This provided money that recipients could spend on their care and assistance.
In 1913, 46% of Australians were covered by friendly societies, with the figure rising to 50% in Victoria, South Australia and Tasmania. These societies employed many pharmacists and early-career doctors.
The federal government's Repatriation Pharmaceutical Benefits Scheme was established in 1919 for Australian servicemen and women who had served in the Boer War and World War I. This allowed them to receive certain pharmaceuticals for free. In 1926, the Royal Commission on Health found that a national health insurance scheme should be established. Legislation to do so was tabled in parliament in 1928, 1938 and 1946, but did not pass each time. It was strongly opposed by the friendly societies and medical practitioners.
NSW introduced a requirement for businesses to have worker injury insurance in 1926, which made it more likely injured workers would receive compensation from their employer. The other states and territories followed.
From 1935 to the 1970s, paid sick leave was gradually introduced into federal employment awards until 10 days sick leave per year became standard.
In 1941 the Curtin government passed the Pharmaceutical Benefits Act, however it was struck down as unconstitutional by the High Court in 1945.
Another Curtin government action in 1941 was the beginning of the "Vocational Training Scheme for Invalid Pensioners". This provided occupational therapy and allied services to people who were not permanently incapacitated, to help them gain employment. In 1948, this body became the Commonwealth Rehabilitation Service, and its work continued.
Under the Chifley government Hospital Benefits Act 1945, participating states and territories provided public hospital ward treatment free of charge. Non-public ward treatment for people with health insurance was subsidised by the Commonwealth. This led to an increase in the number of Australians covered by private health insurance plans.
Then from 1946, Queensland's Cooper government introduced free public hospital treatment in that state. This was retained by future Queensland governments.
A 1946 referendum changed the constitution so that the federal government could more clearly fund a range of social services including "pharmaceutical, sickness and hospital benefits, medical and dental services."
And so in 1948, the establishment of the Pharmaceutical Benefits Scheme expanded the earlier ex-soldier only scheme to all Australians. The Labor government who introduced this had hoped to introduce further national healthcare measures like those of Britain's National Health Service; however, they were voted out of office in 1949, before they had sufficient Senate support to pass the legislation. The incoming Menzies government wound back the PBS, with it continuing in a more limited form than originally planned.
In 1950, the Menzies government established the Pensioner Medical Service, providing free GP services and medicines for pensioners and their dependants..
The National Health Act 1953 reformed the health insurance industry and the way hospitals received federal funding. Health Minister, Dr Earle Page, said that these changes would "provide an effective bulwark against the socialisation of medicine." The federal government began to offer some subsidy for all private health insurance funded services. The very poor received free health care. In 1953, private health insurance covered all but 17% of Australians. By 1969, 30% of all private health insurance costs were being paid by the federal government. While the creators of the 1953 scheme had intended that the subsidised private health insurance would fund 90% of health costs, it only covered between 65 and 70% between 1953 and 1969.
In 1969, the Commonwealth Committee of Inquiry into Health Insurance recommended a new national health scheme. The Gorton government under Health Minister, Dr Jim Forbes, provided free private health insurance for the unemployed, seriously ill workers, the severely disabled, new migrants, and households on a single minimum wage. In September 1969 the National Health Act was amended, and the scheme came into effect on 1 January 1970.
In 1972, 17% of Australians outside of Queensland had no health insurance, most of whom were on low incomes.
Medibank (1975–1976)
The Whitlam government, elected in 1972, sought to put an end to the three-tier system by extending healthcare coverage to the entire population. Before the Labor Party came to office, Bill Hayden, the Minister for Social Security, took the main responsibility for developing the preliminary plans to establish a universal health scheme.According to a speech to Parliament on 29 November 1973 by Mr Hayden, the purpose of Medibank was to establish the "most equitable and efficient means of providing health insurance coverage for all Australians."
The Medibank legislation was one of the bills which led to a double dissolution on 11 April 1974, and was later passed by a joint sitting on 7 August 1974. Parliamentarians planned for Medicare to be funded by a 1.35% income tax. However, this was rejected by the Senate, so it was instead funded from consolidated revenue.
Medibank started on 1 July 1975. In nine months, the Health Insurance Commission had increased its staff from 22 to 3500, opened 81 offices, installed 31 minicomputers, 633 terminals and 10 medium-sized computers linked by land-lines to the central computer, and issued registered health insurance cards to 90% of the Australian population.
Medibank Mark II (1976–1981)
After a change of government at the December 1975 election, the Fraser government established the Medibank Review Committee in January 1976. This led to legislative changes, and the launch of 'Medibank Mark II' on 1 October 1976. It included a 2.5% income levy, with taxpayers having an option of instead taking out private health insurance. Other changes included reducing rebates to doctors and hospitals. Over the following years, universal free hospital access ceased in almost all hospitals, with only the poor receiving free access.Also that year, the Fraser government passed the Medibank Private bill, which allowed the HIC to enter the private health insurance business. It was to become the dominant player in that market.
In 1978, bulk billing was restricted to pensioners and the socially disadvantaged. Rebates were reduced to 75% of the schedule fee. The health insurance levy was also scrapped that year. The next year, Medibank rebates were cut further. In 1981, access to Medibank was restricted further, and an income tax rebate was introduced for holders of private health insurance to encourage its uptake. Finally, the original Medibank was dissolved entirely in late 1981, leaving behind Medibank Private as a government-operated private health insurer.