Jane Dotson
Australia's health insurance system is a combination of public and private services. The public system, known as Medicare, is a universal healthcare system that provides free emergency medical care and treatment for all Australians, regardless of income. It is funded by the federal, state, or territory, and local governments, as well as through general tax revenue and a government levy. The private system, on the other hand, offers more choice and quicker access to some health services, covering the cost of treatment as a private patient in a hospital, and sometimes providing extras cover. The Australian government also provides funding and support for other health programs, such as the National Disability Insurance Scheme (NDIS) and the Pharmaceutical Benefits Scheme (PBS).
| Characteristics | Values |
|---|---|
| Name of the universal healthcare system | Medicare |
| Who does it cover? | Australian citizens, permanent residents, and some visitors and visa holders |
| What does it cover? | Emergency medical care, treatment in public hospitals, common diagnostic and community tests, such as x-rays and blood tests, free annual eye check-ups, etc. |
| What does it not cover? | Allied health treatments, procedures for non-life-threatening conditions, cost of glasses, contact lenses, hearing aids, remedial physiotherapy, acupuncture, ambulance services, most dental care, cosmetic surgery, etc. |
| Who provides health insurance? | Health insurance organisations called health funds |
| Is it mandatory to have health insurance? | No, it is optional |
| What does private health insurance cover? | Cost of treatment as a private patient in a hospital, and may provide "extras" cover |
| What are the two types of private health insurance policies? | Hospital cover and Extras cover |
| What is Hospital cover? | Pays for the cost of treatment in a private or public hospital |
| What is Extras cover? | Pays for the cost of medical services that Medicare does not cover |
| What is the National Disability Insurance Scheme (NDIS)? | Australia's national disability-related health care program, managed by the National Disability Insurance Agency |
| Who is NDIS for? | Individuals with disabilities to help them with medical management and social support |
| What is the Pharmaceutical Benefits Scheme (PBS)? | Subsidises certain prescribed pharmaceuticals |
| What is the Medicare Levy Surcharge (MLS)? | A surcharge for people earning above a certain threshold who don't have private hospital cover |
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What You'll Learn
Medicare and private health insurance
Medicare is the foundation of Australia's healthcare system. It is a universal healthcare system that provides free emergency medical care and treatment for all Australian citizens, permanent residents, and some visitors and visa holders. Medicare funds common diagnostic and community tests, such as X-rays and blood tests, and covers the cost of treatment as a public patient at a public hospital for elective, emergency, or medically necessary treatments. However, it does not cover all medical services, and there may be lengthy waiting lists for certain treatments at public hospitals.
Private health insurance in Australia works alongside the public healthcare system to offer more choice and quicker access to some health services. It typically consists of hospital cover and general treatment cover, also known as "extras" cover. With private health insurance, individuals can choose to be treated as private patients at either private or public hospitals, provided that the service is included in their cover. Private health insurance may also help cover some healthcare costs that Medicare does not, such as remedial physiotherapy, acupuncture, and dental care.
The Australian government encourages high-income earners to take out private health insurance through various incentives and penalties. For example, individuals who earn above a certain income threshold and do not have private health insurance may have to pay the Medicare Levy Surcharge, an additional tax. On the other hand, the government offers rebates and incentives to make private health insurance more affordable, especially for younger people. The Lifetime Health Cover initiative, for instance, encourages individuals to take out hospital cover before turning 31 to avoid paying higher premiums later in life.
In summary, Medicare provides a solid foundation for healthcare in Australia, ensuring that all citizens and permanent residents have access to essential medical services. Private health insurance supplements this by offering more flexibility, faster access to services, and coverage for additional treatments. The interplay between the two ensures that Australians have a robust and comprehensive healthcare system that caters to their diverse needs.
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Lifetime Health Cover
LHC loadings only apply to hospital cover. Only private hospital cover with Australian-registered private health insurers is considered complying hospital cover for the purpose of Lifetime Health Cover. General treatment (extras) cover, Overseas Visitors Health Cover, and international forms of insurance are not considered to be hospital cover for Lifetime Health Cover purposes.
If an individual cancels their hospital insurance after their Lifetime Health Cover base day to go overseas for at least one continuous year, the days spent outside of Australia are not counted towards the 1094 days of absence. They can return to Australia for periods of up to 90 consecutive days, per visit, and be considered overseas. Any periods of 90 days or more spent in Australia during this time will be deducted from the 1094 days of absence.
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Pharmaceutical Benefits Scheme
The Pharmaceutical Benefits Scheme (PBS) is a health policy that subsidises the cost of certain prescribed pharmaceuticals. The PBS was established in 1948, before the introduction of Medicare, and is administered by the Department of Human Services Insurance, with input from other bodies such as the Pharmaceutical Benefits Pricing Authority.
The PBS offers safe, affordable medicines to all Australians, with some prescriptions available at a government-subsidised price. The PBS Schedule lists all the medicines available under this scheme. The PBS does not cover the full cost of medications, and not all medications are covered. However, it helps Australians access necessary prescribed medicines at a lower cost. The amount payable depends on the medicine.
Concessional patients, such as low-income earners, welfare recipients, and Health Care Card holders, pay a patient contribution that was $6.50 in 2019. Patient contributions are compulsory and cannot be discounted by pharmacies. The PBS Safety Net further reduces costs for those who spend a lot on medicine, and it is separate from the Medicare Safety Net. The PBS Safety Net is also available to foreign visitors from certain countries with reciprocal health care agreements.
The Prescription Shopping Programme (PSP) identifies patients who may be receiving more PBS-subsidised medicines than they need. It flags patients who, in any 3-month period, receive any PBS items prescribed by 6 or more prescribers or a total of 50 or more items.
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National Disability Insurance Scheme
Australia's healthcare system, Medicare, provides free emergency medical care and treatment for all Australians, regardless of income. Medicare funds common diagnostic and community tests, such as x-rays and blood tests. However, it does not cover all medical services, and there is no provision for the cost of glasses, contact lenses, hearing aids, remedial physiotherapy, or acupuncture.
The National Disability Insurance Scheme (NDIS) is Australia's national disability-related healthcare program, managed by the National Disability Insurance Agency. The NDIS provides funding and support to Australians with disabilities to help them participate in the economy and community. The scheme also provides support for family members to aid them in caring for their loved ones and prevent issues like carer burnout. The NDIS provides a national platform for individuals with disabilities to access funding and resources for medical management and social support to help them pursue their dreams, careers, and hobbies.
The NDIS is standardised across Australia and has improved the quality of life for many people with disabilities. It is important to note that Medicare contributions to health services are only made for Australian citizens and permanent residents, although some visitors and visa holders may also be eligible for Medicare coverage.
In addition to Medicare, Australia also has a private health insurance system, which individuals are encouraged to purchase through tax surcharges. Private health insurance offers more choice and quicker access to some health services. It is optional and covers the cost of treatment as a private patient in a hospital, and may provide "extras" cover.
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Public and private health systems
Australia's health system is jointly run by the federal, state, and territory, and local governments. It operates under a shared public-private model underpinned by the Medicare system, the national single-payer funding model.
Public Health System
The public health system in Australia is made up of public hospitals, community-based services, and affiliated health organizations, largely owned and governed by state and territory governments. Australian citizens, permanent residents, and people from countries covered by Reciprocal Health Care Agreements can access care within the public health system for free or at a lower cost through Medicare, which is funded by taxes. Medicare covers the cost of treatment as a public patient in a public hospital for elective treatments, emergency or medically necessary treatments, and a range of common diagnostic and community tests, such as x-rays and blood tests.
Private Health System
The private health system in Australia includes health service providers that are owned and managed privately, such as private hospitals, specialist medical and allied health services, and pharmacies. The private system is funded by private health insurers and, sometimes, through payments by patients. Private health insurance can give people with cover the option to avoid waiting lists in the public system and the ability to choose their own doctor. The Australian government offers a means-tested rebate to people who hold private health insurance and imposes the Medicare Levy Surcharge on higher-income earners who do not have an appropriate level of private patient hospital cover.
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Frequently asked questions
The public health system in Australia is called Medicare.
Australian citizens and permanent residents are eligible for Medicare. Some visitors and visa holders are also entitled to Medicare coverage.
Medicare covers free emergency medical care and treatment for all Australians, regardless of income. It also funds common diagnostic and community tests, such as X-rays and blood tests.
Medicare does not cover certain medical services, including allied health treatments and procedures for non-life-threatening conditions. It also does not cover the cost of glasses, contact lenses, hearing aids, remedial physiotherapy, or acupuncture.
Private health insurance in Australia covers the cost of treatment as a private patient in a hospital and may provide "extras" cover. It pays for healthcare and medical expenses that are not covered by Medicare.
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