Why donu2019t employers in Australia prinsurance to fill gaps of Medicare (Canada does that)?
Why donu2019t employers in Australia prinsurance to fill gaps of Medicare (Canada does that)?Prior to the 1980s there were companies in Oz that provided a range of Fringe Benefits such as gap insurance or full private health insurance. In fact, just after Medicare was introduced, the insurance company FAI had a policy for u201cgapu201d insurance, but that threatened u201cthe scheduled feeu201d regime of the government and encouraged MDs to charge above the schedule fee. MDs can to this day charge above the schedule fee, and its upto the patient whether to change MDs to avoid the excess or not. In any case, the laws changed & insurance companies either had to prfull health insurance comparable to Medicare or none at all (they could prsupplementary cover for dental, chiro etc & other services not covered by Medibank).Anyway, prior to 1986 execs like me took full advantage of negotiating fringe benefits in lieu of salary to avoid (reduce) income tax (the top rate was 60% on each $ over x amount).To reduce income tax overall, the government introduced a Fringe Benefit Tax (FBT), that gross up the u201cnetu201d (pocketed) benefit and taxed FBs at the top rate. That caused junior execs to be worse off but had no real inpact on senior execs. The admin overhead to report & collect FBTs was a pain for business, so many large businesses stopped offering FBs & initially grossed up salaries instead. Some companies continue offering FBs, but usually in the form of cars, private school fees, golf club fees etc. Depending on how FBs are structured they have tax advantages - an industry evolved ti design u201csalary forfeituresu201d in exchange for FBs to minimize (avoid) income tax (eg: granting of options or shares has major tax advantages). Like car leasing, some companies instead of direct provision have arrangements with health funds for u201cbulk ratesu201d which are cheaper than the normal retail offerings. The major advantage over employer provided health cover, is the employee can take their health cover from employer to employer or change funds offering better rates or cover.Years ago I read how the USA ended up with its strange, inequitable system of employer sponsored health insurance. My memory is vague on the details, but as I remember it, after WW2 there were labour shortages in certain occupations, and employers came to offering sweeteners to attract people to them. Then came the McCarthy (there is a commie under every bed) purges of the 1950s , and that put the nail in the coffin of publicly subsidised health care.Before medicare, here in Australia we had non-profit mutual funds & benevolent societies that provided health insurance. Then USA carpetbaggers entered the market, which led to the Health funds demutalising & becoming for-profit organisations. Health costs began to rise because of the obvious monopolies, so Oz put the brakes on this exploitation and introduced Medicare which gave the same cover at a lower cost to the populace. Australians pay a contribution of 2% of net taxable income towards medicare costs (the rest comes from general revenue). There is no cost to low income households & pensioners. Persons earning excessive income (over $90k for singles, or $180k for households) pay a 1% surcharge or are obligated to take out private health cover (their free choice).In my families experience, it is a most excellent system if you are genuinely ill and needing medical assistance. You see the MD of your choice. Generally you see the specialists your MD refers you to, just as happens with private insurance. If stuck in hospital, youu2019ll generally be admitted to a ward with four beds in it (my preference). Sometimes when there is necessity you are put in a private room (most lonely if you arenu2019t sedated or high on medication). In a public hospital, like private health cover, you generally donu2019t get a choice of doctor etc but everything is free (private hospitals itemise everything and you are at the mercy of the health funds for partial remittances).
