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Health care in Australia is primarily funded through the public Medicare program and delivered by highly regulated public and private health care providers. Individuals may purchase health insurance to cover services offered in the private sector and further fund health care. Health is a state jurisdiction although national Medicare funding gives the Australian or Commonwealth Government a role in shaping health policy and delivery.
The federal government-administered Medicare insurance scheme covers much of the cost of primary and allied health care services. States and the federal government provide the majority of spending through Medicare and other programs. Individuals contribute more than half of the non-government funding.
Medicare is a single-payer universal health care scheme that covers all Australian citizens and permanent residents, with other programs providing additional coverage for specific groups, such as veterans or Indigenous Australians, and various compulsory insurance schemes cover personal injury resulting from workplace or vehicle incidents. Medicare is funded by a Medicare levy, which currently is a 2% levy on residents’ taxable income over a certain income. Higher income earners pay an additional levy if they do not have private health insurance. Residents with certain medical conditions, foreign residents, some low-income earners, and those not eligible for Medicare benefits may apply for an exemption from paying the levy, and some low-income earners can apply for reductions to the levy.
In 1999, the Howard Government introduced the private health insurance rebate scheme, under which the government contributed up to 30% of the private health insurance premium of people covered by Medicare. Including these rebates, Medicare is the major component of the total Commonwealth health budget, taking up about 43% of the total. The program was estimated to cost $18.3 billion in 2007–08. In 2009 before means testing was introduced, the private health insurance rebate was estimated to cost $4 billion, around 20% of the total budget. The overall figure was projected to rise by almost 4% annually in real terms in 2007. In 2013–14 Medicare expenditure was $19 billion and expected to reach $23.6 billion in 2016/7. In 2017–18, total health spending was $185.4 billion, equating to $7,485 per person, an increase of 1.2%, which was lower than the decade average of 3.9%. The majority of health spending went on hospitals and primary health care. Health spending accounted for 10% of overall economic activity.