What is Medicare?

What is Medicare?

Medicare is Australia's universal health system. It ensures that all Australians, permanent residents and some overseas visitors have little or no out-of-pocket expenses when they need to go to the hospital or visit a doctor.

However, Medicare won't cover everything — Medicare doesn't cover most dental work, for example. That's part of why more than half of all Australians also take out private health insurance.

What does medicare cover?

Medicare benefits can be placed in 3 main groups: cover for hospital treatment, cover for treatment outside a hospital and subsidies for medications.

What doesn't Medicare cover?

There are a number of hospital and non-hospital related services and treatments that aren't covered by Medicare. These include as follows:

How do out-of-pocket expenses work?

An out-of-pocket expense, also known as "the gap", is essentially the difference between how much a doctor charges and the rebate you get from Medicare.

Medicare rebates are paid as a percentage of the overall bill for a health service. This fee can be up to 100% for consultations provided by a GP.

To avoid out-of-pocket expenses, you can restrict your doctor's visits to medical centres and practices that offer bulk billing. Alternatively, you could take out private health insurance, which reduces or in some cases fully covers these extra costs.

The Medicare benefit for getting specialist treatment only covers 75-85% of the overall cost. In this case:

• You'll have to pay "the gap" amount, and
• Any out-of-pocket expense, if the consulting specialist charges more than the schedule fee

The Medicare Benefits Schedule (MBS) lists all the Medicare rebates available for medical services in Australia.

What exactly is "bulk billing"?

Bulk billing

A doctor sets their fees according to the benefit costs outlined in the MBS, meaning there won't be any cost to the patient. There's no out-of-pocket expenses or gap payments to worry about. Ask if a GP offers bulk billing before you make a booking.

Non bulk-billing

Many GPs and specialists won't offer bulk billing, and will usually charge a fee higher than that listed in the MBS. You might get discounted rates if you're a concession or pension card holder. The gap between your rebate from Medicare and the consultation fee is the amount you must pay.

Who is eligible for Medicare?

Australian citizens

Medicare is available to all permanent residents (including holders of Resident Return visas) and Australian citizens living in Australia.

Citizens from other countries

You're eligible for some cover under Medicare if you're a New Zealand citizen living in Australia, applying for Australian permanent residency, or from a country that has a Reciprocal Health Care Agreement with Australia.

Medicare vs private health insurance

Having access to top-quality health care for free, or at a subsidised price, is not something that's available everywhere in the world, and the Australian public health system does a good job if you need urgent medical treatment.

On the other hand, you can typically enjoy more choice and flexibility as a private patient, and private health insurance can make your treatment much more affordable. Benefits include your choice of doctor, admittance when you need it, a private room, and more, as our guide to public vs private healthcare explains.

Pros and cons of private health insurance

Tax and private health insurance

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.

Find out how you could get as much as 33% back on your premiums by claiming the private health insurance rebate. And get more details on how to avoid the Lifetime Health Cover Loading and the Medicare Levy Surcharge, if applicable.

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Frequently asked questions

• What is Medicare?

  Medicare is Australia's universal health system which offers Aussies (and some overseas visitors) access to free or subsidised health care.

• What does Medicare cover?

  Broadly, Medicare offers cover for hospital treatment; treatment outside a hospital and subsidies for pharmaceutical medications.

• What does Medicare not cover?

  Medicare won't subsidise a range of hospital and out-of-hospital treatments. That may help explain why 54.3% of the population holds some form of private cover, according to APRA figures.

• Am I eligible for Medicare?

  All Australian citizens and permanent residents are eligible for Medicare. You'll also be eligible if you're a citizen of New Zealand, or any other country that has a reciprocal healthcare agreement, and live in Australia. Applicants for Australian permanent residency are also generally eligible.

• How do I make a Medicare claim?

  Health care professionals can bill you for medical services in 2 ways:

  • Bulk billing. Your doctor accepts the MBS fee as payment for their service and charges Medicare directly. Bulk billing doctors are most common in cities and less so in rural areas where there may be a shortage of health care professionals. Be aware that specialists rarely offer bulk billing, and will usually charge a fee higher than that listed in the MBS.
  • Patient account. If your doctor doesn't bulk bill, you will be required to pay your fees before claiming your benefit back from Medicare.

  Several options are available for lodging your claims with Medicare:

  • In person. Your doctor sends your claim to Medicare via EFTPOS when you pay your bill, and the benefit is paid directly into your bank account. This is the most efficient way to claim, although not all medical centres and practices offer it.
  • Smartphone app. You can link your Medicare online account to the Express Plus Medicare mobile app and claim from your IOS, Android and Windows 10 devices.
  • Over the phone. Make a claim over the phone by providing your Medicare number, your bank details and your doctor's receipt.
  • Medicare online claim. Rebates for some services can be claimed through the Department of Human Services website using your Medicare Online Account. Be aware that you can't claim online if you have been bulk billed or if your claim is for a service provided by a hospital. Additionally, you can't lodge claims for persons who are not listed on your Medicare card or lodge claims that are more than 2 years old.
  • Traditional mail. Complete a Medicare claim form and return it by post to Medicare, GPO Box 9822, "your capital city", or drop it off at your nearest Medicare Service Centre. Your doctor can provide you with the claim form or you can get it in PDF format from the Department of Human Services website. People with private health insurance can drop their claim forms off at their nearest health fund office if they are Medicare Two-way participants.

• What is the Medicare Safety Net?

  The Medicare Safety Net increases your Medicare benefit once your out-of-pocket expenses reach certain thresholds, to help ease the financial burden of these extra costs.

  The amount of out-of-pocket expenses that count toward the Medicare Safety Net are now capped at 150% of the MBS fee per treatment or services, minus the Medicare rebate.

  Here are some examples of 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?
  $481.20	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
  $697.00	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
  $2,184.30	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 2021}