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Medicare provides free health care in Government funded public hospitals, a rebate on the expenses incurred when visiting a doctor, and subsidises the cost of essential medications through the Pharmaceutical Benefits Scheme (PBS). However, Medicare should not be relied upon as a total health care solution, and in order to achieve comprehensive medical cover its advised to look into taking out some form of private health insurance.
Australia's public health system was first introduced under the Whitlam Government in 1975 as Medibank, and was changed to its more familiar name Medicare in 1984. Today Medicare constitutes a major part of Australia's social safety-net, and is regarded globally as a prime example of an effective universal health care model. All Australian citizens, permanent residents and visitors from Reciprocal Health Care Agreement countries are eligible for cover under the public health system.
Medicare benefits can be categorised into three main groups which are cover for hospital treatment, cover for treatment outside a hospital and subsidies for prescription medications.
Medicare provides you with free treatment at a public hospital. You should be aware that:
Medicare will cover the cost of going to see a doctor or general practitioner. If you need to see a specialist, Medicare will pay a benefit up to a percentage of the specialist’s fee. The non-hospital related services that are eligible for benefit payments are outlined in more detail below rather than listing answers to questions like does medicare cover dentist or does medicare cover surgery down the page.
Medical service type | What's covered |
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Consultations |
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Examinations |
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Out-of-hospital surgery |
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Dentistry and the Cleft Lip and Cleft Palate Scheme |
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Optometrist |
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Chronic disease management |
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Medicare also covers the cost of some prescription medications under the Pharmaceutical Benefits Scheme. Like the MBS Fee Schedule, the PBS Schedule outlines which medications are subsidised by the government and the price of the drug. Dentists and optometrists have a schedule for patients too.
Even with the PBS, you may be responsible for paying part of the cost of the medication. The amount that’s covered by the PBS varies depending on the medication. In many cases, you will be able to choose between two versions of the same drug, although the benefit will remain the same so if one is more expensive than the other you will have to make up the difference.
You’re eligible for further concessions on the price of medication under the Medicare Safety-Net if your out-of-pocket expenses reach the safety-net threshold.
Back to topThe following items, broken down into hospital and non-hospital related services and treatments, are excluded from the public health system. Most of these treatments and services can be covered by private hospital and extras insurance.
Medicare category | Excluded services and treatments |
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Hospital |
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Out-of-hospital |
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Medicare will pay a percentage of the schedule fee listed under the Medicare Benefit Schedule (MBS). Medical services are covered by Medicare in accordance with the MBS Quality Framework. The MBS Quality Framework's purpose is to ensure covered items are in line with best medical practices. The rebate percentage for each service is as follows:
If you are covered by private hospital insurance and are admitted to hospital Medicare will cover 75% of your associated medical costs instead of 100%, with the remainder being covered by your health fund. Also be aware that theatre fees, costs of medicine and hospital accommodation expenses will not be covered by Medicare.
Back to topA common misconception is that Medicare will always cover your entire doctors bill, which is understandable since it states that its rebate is 100%. What some people don't realise is this means 100% of the cost defined by the MBS fee, and that doctors and specialists are not required to charge the same amount. The following scenario should make it easier to understand how this process works.
Out-of-pocket expenses are a very important thing to be aware of when visiting the doctor, and even more so when getting treatment from a specialist. In these cases the Medicare benefit for getting specialist treatment only covers 85% of the schedule fee. So not only will you have to pay the gap amount, but also out-of-pocket expenses if the consulting specialist charges more than the schedule fee, which they often do.
To avoid out-of-pocket expenses you can either restrict your doctors visits to medical centres and practices that offer bulk billing (be aware that specialists rarely bulk bill), or take out private health insurance, which reduces or in some cases fully covers these extra costs. It's also worth noting that being treated at hospital can also incur out-of-pocket expenses which can only be covered by a private health fund policy.
If you are unable to afford private health insurance and require complex or extensive out-of-hospital medical services, the gap payments can be very expensive. The Medicare Safety-Net increases your Medicare benefit once your out-of-pocket expenses reach certain thresholds to ease the financial burden these extra costs can put on you or your family.
This chart displays the gap payment threshold that must be reached for each eligibility category before the Medicare Safety-Net benefit increase is applied.
Gap payment threshold | Who's eligible? | How is it calculated? | What's the benefit increase amount? |
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$447.40 | All Medicare card holders | The gap amount (difference between the Medicare benefit and the schedule fee) | 100% of the schedule fee for out-of-hospital services |
$647.90 | Valid Concession card holders and families eligible for the Family Tax Benefit (FTB) Part A | Out-of-pocket expenses | 80% of out-of-pocket expenses or the Extended Medicare Safety-Net (EMSN) benefit cap for out-of-hospital services |
$2,030.00 | All Medicare card holders | Out-of-pocket expenses | 80% of out-of-pocket expenses or the EMSN benefit cap for out-of-hospital services |
Source: Australian Government Department of Human Services, Medicare Safety-Net Thresholds 2016
Health care professionals can bill you for medical services in two ways:
Several options are available for lodging your claims with Medicare:
To apply for Medicare membership you must fill out an enrolment form and submit that, along with your supporting documents, at your nearest Medicare Service Centre. You can obtain the form at the Service Centre or download it in PDF format from the Department of Human Services website. Australian citizens can use their passport or birth certificate as their supporting document while eligible overseas visitors can use their passport.
Reciprocal Health Care Agreements (RHCA) are made between other countries and the Australian Government to allow citizens of both nations access to cover and subsidies on essential medical services under their public health systems. Countries who currently participate in the RHCA are:
If you are planning to come to Australia and are wondering how to get medicare, please keep these two points in mind:
Having access to top quality health care for free, or at a subsidised price, is not something that is available everywhere in the world, and the Australian public health system does a good job if you need urgent medical treatment. However, if you require cover for non-emergency care you will find the public health system can be quite limited.
This is where private health insurance steps in, fulfilling two purposes that benefit both individuals and the wider Australian community by:
There are three main types of private health insurance policy; hospital, extras and ambulance. Below you can learn more about the specific Medicare excluded treatments and services that you can get cover for under these policies.
Health insurance policy type | Benefits and cover it provides that Medicare doesn't |
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Want to know more about private health insurance? Head to our comprehensive FAQ
Back to topAs mentioned before, one of the positive aspects of private health insurance is easing the burden on the public health system. To encourage more people to get private cover, the Australian Government has adopted a carrot-and-stick approach by implementing tax levies and loadings for not being insured by a health fund while offering rebates for taking out a policy. These rewards and penalties are explained in more detail below.
The government offers you an income-tested rebate if you take out private insurance and you’re eligible for Medicare. The benefit comes in the form of reduced private health insurance premiums or a rebate on the cost of your private cover at the end of the financial year.
The rebate has four tiers, the base tier pays more than Tier 3, with the amount being determined by your income, your number of dependent children and your age.
The rebate levels applicable from 1 April 2019 to 31 March 2020 are:
Singles | ≤$90,000 | $90,001-105,000 | $105,001-140,000 | ≥$140,001 |
---|---|---|---|---|
< Age 65 | 25.059% | 16.706% | 8.352% | 0% |
Age 65-69 | 29.236% | 20.883% | 12.529% | 0% |
Age 70+ | 33.413% | 25.059% | 16.706% | 0% |
Families | ≤$180,000 | $180,001-210,000 | $210,001-280,000 | ≥$280,001 |
---|---|---|---|---|
< Age 65 | 25.059% | 16.706% | 8.352% | 0% |
Age 65-69 | 29.236% | 20.883% | 12.529% | 0% |
Age 70+ | 33.413% | 25.059% | 16.706% | 0% |
The Medicare Levy Surcharge (MLS) applies if you’re a high income earner and you don’t have private hospital insurance. In addition to the Medicare Levy, you’re required to pay up to an extra 1.5% of your taxable income. The justification is simple; if you earn more, you’re expected to contribute more to the public health system. If you have private hospital cover, you’re exempt from paying the MLS no matter your income.
Like the Private Health Insurance Rebate a tier system dictates how high your levy will be based on your income.
Singles | ≤$90,000 | $90,001-105,000 | $105,001-140,000 | ≥$140,001 |
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All ages | 0.0% | 1.0% | 1.25% | 1.5% |
Families | ≤$180,000 | $180,001-210,000 | $210,001-280,000 | ≥$280,001 |
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All ages | 0.0% | 1.0% | 1.25% | 1.5%
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Unlike the MLS, the Lifetime Health Cover (LHC) loading penalises you with higher private health insurance premiums when you take out cover rather than taxing you. It applies a loading surcharge of 2% to your premium every year after your 30th birthday, up to a maximum cap of 70%.
Loading fees can cost you hundreds of extra dollars every year. For example, if you wait until your 40th birthday to take out private cover you’ll pay 20% more compared to getting cover on your 30th birthday. A minimum weekly premium of $20 will cost you $24 with loading. The surcharge will expire after you’ve held private hospital cover for 10 consecutive years.
You can avoid this by simply taking out private health insurance by the 31st of July before your 31st birthday. Many health funds offer affordable budget policies, albeit with limited cover, that are designed for young and healthy people who are just seeking insurance to avoid this penalty.
Picture: Shutterstock
If you need to undergo a blood test, will Medicare or your private health fund foot the bill? Find out in this handy guide.
Learn about the Pharmaceutical Benefits Scheme (PBS), what it covers and how it can help you.
What is the Medicare Safety Net, how does it work and what does it mean for your out-of-pocket medical costs? Find out here.
What is the Medicare Benefits Schedule (MBS) and what medical services does it cover? Find out in this comprehensive guide.
What is bulk-billing and what medical services can you bulk-bill in Australia? Find out here.
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Need new card
Hi Steven,
Thanks for leaving a question on finder.
To request for a replacement card, kindly follow these steps:
Step 1: Sign in. Go to myGov and open your Medicare linked service.
Step 2: request the replacement or duplicate card. To request a replacement card check the Request replacement card check box and select the reason you’d like to get your card replaced.
Step 3: submit card request.
Step 4: sign out.
That’s it. Expect your replacement card in a few days.
Cheers,
Joel