The Difference Between Medicare and Private Health Insurance

Medical costs can financially cripple patients if they don’t have insurance. In some cases, people without medical coverage may not receive medical treatment or appropriate care because of financial obstacles.

Health insurance programs vary from country to country. While countries such as Canada and Sweden have universal health care, the United States doesn’t have a universal program that provides all citizens coverage. Individuals may be on Medicare, Medicaid, or a private insurance program. In some countries, such as Australia, Medicare can be supplemented with private insurance. It’s crucial to understand the distinction between Medicare and private health insurance to ensure you secure appropriate medical coverage for you and your family.

Medicare

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Australia provides universal health insurance (Medicare) to all citizens. Those who exceed the income threshold must pay a levy, a percentage of their taxable income. High-income earners are also required to pay a Medical Levy Surcharge. This program reduces the cost of medical treatment to ensure it’s free or affordable for all citizens. Individuals can see doctors and specialists and be treated in a hospital, and use this insurance program to cover those expenses. This program also covers prescriptions.

In the United States, some citizens are eligible for Medicare. Individuals qualify if they’re disabled or at least 65 years of age. This program’s costs are divided into parts. Part A covers hospital care, while Part B covers outpatient and preventive healthcare. Part D covers prescriptions. Your income level will determine which parts you qualify for. If your income exceeds the minimum threshold, you will pay premiums for Part B coverage, and if you don’t qualify for Part A coverage, you can pay monthly fees to add Part A to your plan. Medicaid is a private health insurance program for low-income citizens who do not qualify for Medicare.

Private Health Insurance

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Insurance companies provide private health insurance. It pays for medical expenses not covered by their universal insurance program. You can use an insurance comparison tool to compare health insurance plans to determine what they include, the regions they cover, and the cost. Private health insurance will protect you from incurring the full cost of medical treatments that aren’t included in your universal healthcare plan. You can also opt to receive care in a private hospital if you have appropriate private health insurance coverage.

In the United States, over 55 percent of citizens had employer-based health insurance in 2019. A private insurance company provides healthcare coverage per the terms of the policy. Monthly premiums may be paid for by the employer or employee, or they may share the costs. Individuals can also opt to purchase health insurance directly from insurance companies. Standard policies include doctor’s visits and emergency medical treatment in a clinic or hospital. Plans may determine which doctors or facilities clients can receive medical treatment from, and some tests and treatments may not be covered by health insurance. The specific coverage provided varies from plan to plan, and in addition to their monthly plan costs, patients are responsible for copay costs when they receive treatment.

Exclusions

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Australia’s universal program does not cover the costs of physiotherapy, dental care, or being transported in an ambulance. Individuals who need to see an optometrist need private insurance to cover their optical care or pay their care’s full cost. They’re also responsible for the cost of prescription glasses, contact lenses, or laser eye surgery.

In the United States, standard health insurance doesn’t cover dental and optical care. Individuals can opt to add dental and optical care to their insurance plans but may still be responsible for copay costs. Audiology costs, which include treating tinnitus, are not covered by standard health insurance plans either. Some plans pay for an annual hearing test, but patients must pay additional testing or treatment costs or acquire a plan to cover audiology. Patients can also expect to pay for the cost of hearing aids.

Medicare is medical coverage provided by the government. While all citizens qualify for Medicare in Australia, in the United States it’s restricted to seniors and individuals with disabilities. Individuals on this program in either country may still be required to pay some healthcare fees based on their income level. In Australia, private health insurance supplements their universal program by covering additional services. In the United States, private health insurance is the most common form of health insurance. Most people pay premiums and receive private health insurance through their employer.