Healthcare Insurance and Medicare in Australia for PR Holders and Immigrants

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

The public-funded healthcare scheme, Medicare, is financed through income tax. Health insurance provided by Medicare is available to all permanent residents of Australia and visitors to Australia under a reciprocal agreement.

In recent years, the Australian tax system has undergone changes that have encouraged many Australians to take out private health insurance.

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 prioritise your case and evade the waiting period.

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

Services out of Hospital

Apart from providing services within the hospitals, Medicare also extends its services outside 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 their eyes tested once in every two years
• Medicare also covers some surgeries performed by doctors and dentists outside public hospitals

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 private insurance before providing ambulance assistance. Though you will receive the ambulance bill if you choose 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
• Medicare will not cover the cost of physiotherapy, Chiropractic, and Osteopathy
• Medicare will not cover the cost of hearing aids
• Medicare does not cover podiatry costs
• 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 Medicare will pay them. So, in this case, you may have to pay the extra charges, referred to 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

Medicare, however, pays 100% of the service’s scheduled fee. However, if the service is availed from specialists and consultants, Medicare benefits of up to 85% will be paid, and the patient will be responsible for the remaining amount. The 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 expected cost, 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 a given financial year, the Medicare safety net policy will provide financial assistance to that individual. There is a threshold of payment that an individual must meet; if they reach this threshold, the Medicare rebate will be set at 100%, rather than 85%.

Pharmaceutical Benefits Scheme (PBS)

The Pharmaceutical Benefits Scheme provides funding that reduces the cost of medicines. 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 charged a small fee when purchasing the medicine from the pharmacy. Families with low incomes can apply for a concession card, which will further assist them by reducing the amount they pay for medicines.

There is also a safety net for PBS, applicable to individuals who have spent a significant amount on medicines and have met the PBS threshold for the financial year.

The Healthcare Card

Families and individuals who have low incomes may apply for a 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 centres across Australian states and regions.

Private Healthcare Insurance

Despite having public healthcare insurance, Medicare, Australians still prefer to opt for private healthcare insurance. In Australia, several private health insurance funds operate with various schemes and coverage options.

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

It is up to the customers to decide whether 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 higher benefits when claiming, with no annual limit on claims by paying a premium or selecting a specific treatment or service, such as 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 more than what your private medical insurance will pay for. The excess payment you make will be your out-of-pocket expense.

Out-of-Pocket Expenses

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

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 payments that increase the number of limits for claiming insurance cover, or even set no limits on insurance claims.

Waiting Periods for Health Insurance

You must be aware of the waiting period, generally referred to as the qualifying period. Customers will need to wait for a specific period before being eligible for the health insurance. Waiting periods vary considerably for different schemes.

Switching Your Health Funds

It is essential 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 are entitled to certain medical privileges when visiting Australia, and similarly, Australians are entitled to these privileges when visiting these countries.

How to Claim Medicare as Visitors

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

• Consult a doctor and undergo a checkup. The visitor will need to carry their passport, depending on which country they are from, while consulting the doctor.
• If the doctor bulk-bills, the visitor will not have to pay the bill; however, 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 the Medicare office, where his payment will be refunded. The visitor will also be allotted a Medicare number.

Private Health Insurance for Visitors

If you plan to stay in Australia for an extended period, travel insurance may not be particularly beneficial. You may want to consider Overseas Visitors Health Cover (OVHC), which will cover your health needs while you stay in Australia. Many health insurance companies in Australia specifically provide private health insurance coverage to such visitors.

Healthcare for 457 Visa Holders

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

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 in Australia. Firstly, to be eligible for Medicare, the visa holder must satisfy condition 8501; they will need to take out a private health insurance 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 the Medicare levy automatically.

Medicare Cost

The Australian Medicare is considered the best Medicare service available to people.

Medicare Levy

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

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 $100,000 salary, while the spouse will be paying $1,050 on the $70,000 salary.

Out-of-Pocket Payments to Doctors

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

Examples of Out-of-Pocket Payment

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