The Australian health insurance (Medicare) system is a complex system comprising of both public and private hospitals and healthcare units. While there is the renowned public funded healthcare insurance called the Medicare, Australians also prefer taking up private health insurances for extended security.

The public funded healthcare scheme called Medicare is funded through income tax. Health insurance provided by Medicare is available to all permanent residents of Australia and visitors to Australia under return agreement.

In the past years, the Australian tax system went under some changes which encouraged many Australians to take up private health insurances.

Medicare

As discussed earlier, Medicare is the publicly funded healthcare system that Australians and PR holders enjoy. Under the Medicare scheme, patients receive the following services

• Free treatment at a public hospital as a public patient
• Almost free or sometimes subsidized treatment by GPs
• Subsidies if specialists, optometrists and dentists carry out some treatments

In-Hospital Services

If you visit a public hospital and are attended by a physician, you need not pay for any service or accommodation provided by the hospital. However, you will be paying if you ask the hospital/doctor to prioritize your case and evade waiting period.

If you wish to be treated as a private patient, in a public or private hospital, Medicare will cover 75% of medical schedule fee.

Services out of Hospital

Apart from providing services within the hospitals, Medicare also extends its service out of hospitals, thereby eliminating many medical costs which include:

• Doctor’s Consultation Fees by GPs and some specialists
• Pathology Tests: These include cholesterol and blood sugar level tests, etc
• Radiology: This includes X-rays, ultrasound imaging, CT scan, MRI and PET scans
• Eye Tests: An optometrist conducts the eye tests of a patient, an individual can get his eyes tested once in every two years
• Some surgeries performed by doctors and dentists outside public hospitals are also covered by Medicare

Services Not Covered Under Medicare  

Medicare does not cover the fee for the services mentioned below:

• Ambulance: The paramedic will not check if you have a private insurance or not before providing ambulance assistance. Though, you will receive the ambulance bill if you choose for an ambulance service
• Dental: A routine dental check-up will not be covered by Medicare
• Optical: The cost of glasses or lenses will not be covered by Medicare
• The cost of physiotherapy, Chiropractic, Osteopathy will not be covered by Medicare
• Cost of hearing aids will not be covered by Medicare
• Podiatry costs are not covered by Medicare
• Services including Acupuncture will not be covered by Medicare

Bulk Billing by Doctors

Some doctors may ‘Bulk Bill’ Medicare and in this case they will accept the amount that Medicare pays to them. In this case, you need not pay any charges. However, some doctors may ‘Bulk Bill’ more than what the Medicare will pay them . So, in this case, you may have to pay the extra charges, referred as “Out-of-Pocket’ expenses” that Medicare does not cover.

Medicare Schedule Fees

Medicare benefits paid to doctors are scheduled. Sometimes, medical practitioners can charge more than what other doctors can.

It is up to the individual doctor and not the government to decide if the bill will be a ‘bulk bill’ or not. In suburban regions, the ‘bulk bill’ is not taken out by doctors, which leaves the patient to pay up for the ‘out-of-pocket’ expenses.

So, your private insurance will not be covering your ‘out-of-pocket’ expenses.

Medicare Gap

The Medicare, however, pays 100% of the service’s schedule fee but sometimes if the service is availed from specialists and consultants, the Medicare benefit up to 85% will be paid by Medicare and the rest should be paid by the patient. This payment that the patient pays is called the Medicare Gap.

Out-of-Pocket Expenses

Sometimes doctors may charge much more than the scheduled Medicare fee. In this case, even if Medicare is paying 100% of the scheduled fee, you may still need to pay some extra charges to the doctor. This payment that you make is referred to as ‘Out-of-Pocket’ expenses.

Medicare Safety Net

If an individual is paying a high Medicare gap in the financial year, the Medicare safety net policy will provide financial assistance to the individual. There is a threshold of payment that an individual has to make and if he reaches the threshold, the Medicare rebate will be set to 100% from 85% for the individual.

Pharmaceutical Benefits Scheme (PBS)

The Pharmaceutical benefits scheme provides funding that reduces medicines fees. The medicines prescribed and listed on the PBS are only available for the scheme.

PBS does not cover the entire medicine fee. You will be paying a small charge while buying the medicine from the pharmacy. Families with low income can apply for a concession card, which will further assist them by further reducing the amount that they will be paying for medicines.

There is a safety net for PBS too, which is applicable for individuals who have spent a lot of money on medicines and have met the PBS threshold for the financial year.

The Healthcare Card

Families and individuals who have low income may apply for healthcare card. The healthcare card provides automatic concession on many medical services.

Enrolling in Medicare

Enrolling in Medicare is the first thing that permanent residents should do when they arrive in Australia. The Medicare enrollment can be conducted at any of the Medicare centers across Australian states and regions.

Private Healthcare Insurance

Despite having the public healthcare insurance, Medicare, Australians still prefer to opt for a private healthcare insurance. In Australia, there are a number of private health insurance funding going on with different schemes and covers.

The private health insurance may have associations with medical practitioners and hospitals. These private health insurers may also have their own insurance claiming policies, limits, etc.

It is up to the customers if they want to opt for hospital covers, ancillary covers or both.

Ancillary Covers

The Ancillary health cover works in a way that it covers the services that Medicare does not offer. For example dental, optical, podiatry, physiotherapy, chiropractic, osteopathy, etc.

There are complementary services available for these private health insurance schemes and they are so good that they immediately attract Australians.

Some of these services include a higher benefit when claiming, setting no annual limit claims by paying some premium or selecting any specific treatment or service like an ambulance.

Hospital Covers

The private hospital cover lets you choose which private hospital to choose, which treatment to have and which doctor or consultant will be treating you.

According to the hospital cover policy, you may be charged extra than what your private medical insurance will pay for. This excess payment you make will be your out-of-pocket expense.

Out-of-Pocket Expenses

While Medicare covers most of your medical expenses but sometimes, you are required to pay some extra fee, which is called out-of-pocket expense. The Medicare pays 75% of your medical feel if the fee is above Medicare’s scheduled fees. The remaining 25% is covered by your private health insurance.

Your private health insurance will not cover your pharmaceutical expenses while in hospital.

Limits of Private Insurance Cover

The private insurance can have an annual claim limit. There may be schemes and premium payment that will increase the number of limits of claiming the insurance cover or even set no insurance claim limits.

Waiting Periods for Health Insurance

It is important that you are aware of the waiting period generally referred to as the qualifying period. Customers will need to wait for a certain period before being eligible for the health insurance. Waiting periods vary considerably for different schemes.

Switching Your Health Funds

It is important to review your health insurance policy every 6 months and if you are not happy with any changes to the policy, you can switch your health insurance with minimal effort.

Healthcare for Visitors in Australia

Australia has Reciprocal Healthcare Agreements with the following countries:

• New Zealand
• United Kingdom
• The Republic of Ireland
• Sweden
• The Netherlands
• Finland
• Italy
• Belgium
• Malta
• Slovenia
• Norway

Residents of these countries get some medical privileges while visiting Australia and so do Australians when they visit these countries.

How to Claim for Medicare as Visitors

A visitor to Australia can get a Medicare card but the process is not upfront. The foreigner visitor will need to go through the following process:

• Consult a doctor and get a checkup done. The visitor will need to carry his passport depending upon which country they are from while consulting the doctor.
• If the doctor bulks bills, the visitor will not have to pay the bills but if the doctor does not bulk bill, the visitor will need to pay the bill in full.
• After paying for the treatment, the visitor will take the receipt to Medicare office where his payment will be refunded. The visitor will also be allotted with a Medicare number.

Private Health Insurance for Visitors

If you are staying for a long time in Australia, a travel insurance will not be much beneficial. You may want to consider Overseas Visitors Health Cover (OVHC), which will cover your health, needs while your stay in Australia. Many health insurance companies in Australia specifically provide private health insurance coverage to such visitors.

Healthcare for 457 Visa Holder

A business visa holder (Subclass 457) which is basically a long stay Visa is not eligible for Medicare benefits.

The condition 8501 of the visa application asks the visa holder to maintain proper arrangements for their healthcare while in Australia.

If you are a 457 visa holder and any private health insurer provides insurance to you, you should make sure to collect the letter of verification and show it to DIAC while claiming the insurance.

457 Visa Holders from Reciprocal Countries

As discussed earlier, visitors from reciprocal countries to Australia can enjoy special medical care while being in Australia. Firstly, in order to avail Medicare, the visa holder should satisfy the condition 8501, they will need to take out private health policy.

Once in Australia, the visa holder can obtain a ‘Reciprocal Health Care’ medical card.

Medicare Tax Levy Exemption

A 457 visa holder is exempt from paying tax but only after applying for the Medicare Levy Exemption Certificate. A 457 visa holder cannot be exempted from Medicare levy automatically.

Medicare Cost

The Australian Medicare is claimed as the best Medicare service offered to people.

Medicare Levy

While Medicare is considered as free or low-cost healthcare service, the details below will explain how a family of two adults will need to pay for the Medicare service.

An individual earning $100,000 and his spouse earning $70,000 will be paying a Medicare levy tax of 1.5%. That means the individual will be paying $1,500 on the salary of $100,000 while the spouse will be paying $1,050 on the salary of $70,000.

Out-of-Pocket Payments to Doctors

This example below will help you understand how out-of-pocket payments of Medicare work. For example, Medicare’s schedule fee is of $50 and you consult a doctor for surgery and pay $100, the Medicare will only pay the schedule fee for you i.e. $50. The remaining $50 is your out-of-pocket expense.

Examples of Out-Of-Pocket Payment Examples

Doctor (GP)

Standard consultation
Cost: $67.00
Medicare paid: $34.90
Out-of-pocket payment: $32.10

Doctor (Specialist)

Consultation
Cost: $155.00
Medicare paid: $69.00
Out-of-pocket payment: $86.00

Dentist

6-monthly examination and clean
Cost: $135.00
Health fund paid: $135.00
Out-of-pocket payment: nil

Quick examination and one restoration (filling)
Cost: $175.00
Health fund paid: $97.80
Out-of-pocket payment: $81.20

Chiropractor

Initial consultation (about 30 minutes)
Cost: $75.00
Health fund paid: $35.00
Out-of-pocket payment: $40.00

Standard consultation/manipulation (about 10 minutes)
Cost: $50.00
Health fund paid: $19.20
Out-of-pocket payment: $30.80

Physiotherapist

Initial consultation (about 30 minutes)
Cost: $63.00
Health fund paid: $32.90
Out-of-pocket payment: $30.10

Standard consultation (about 15 minutes)
Cost: $56.00
Health fund paid: $35.60
Out-of-pocket payment: $20.40

Specialist Physiotherapist

Initial consultation (about 60 minutes)
Cost: $200.00
Health fund paid: $32.90
Out-of-pocket payment: $167.10

Standard consultation (about 30 minutes)
Cost: $100.00
Health fund paid: $21.70
Out-of-pocket payment: $78.30