Understanding Medicare in Australia: A Complete Guide

Australia's universal public healthcare system, Medicare, is one of the major attractions among overseas migrants to Australia. It aims to provide equitable access to healthcare to all Australians and permanent residents at no cost or low cost.

This comprehensive guide is helpful for everyone new to Medicare and wanting to apply for it.

Learn about Medicare - what it is, what it includes and excludes, how it works, how to become eligible for Medicare and enrol in it, and find answers to frequently asked questions on this topic.

1. What Is Medicare In Australia?

Medicare is Australia's public-funded universal health insurance scheme that provides payments and services that helps when you, or someone you provide care for, purchase prescription medicines or access health care services.

It covers the treatment cost in public hospitals and subsidises the cost of several health services and medications. This ensures all Australians and most permanent residents (specifically international visitors) access health and hospital services at low cost or free.

Medicare covers visits to doctors, optometrists, specialists, and sometimes dentists under the scheme. People can choose to have only Medicare coverage or a combination of Medicare and private health insurance coverage.

2. What Is The Purpose Of Medicare In Australia?

The main objective of the Medicare system is to ensure all Australian citizens and permanent residents get access to free or subsidised healthcare whenever they need it, irrespective of their location and paying ability.

To achieve this objective, the government offers the following services under Medicare:

• Free-of-cost treatment as a public hospital patient

• Full or partial payment for several healthcare services for citizens and permanent residents in Australia

• An 85% rebate on the scheduled fee for medical treatments that don't require hospital admission, like a visit to the doctor, etc.

• Reimbursement of treatment fees based on the Medicare Benefits Schedule 

• Extra medical support to people incurring more than the Medicare rebate threshold through the Medicare Safety Net.

• Health Care Cards (from Centrelink) for those requiring extra financial assistance. Those on a PR visa must serve a 2-year waiting period before taking advantage of this benefit.

3. When Was Medicare Introduced In Australia?

Medicare was introduced in Australia on 1 February 1984 and aimed to support people by paying for "out of hospital" health services.

At its launch, Australian Health Minister Dr Neal Blewett defined Medicare as a critical social reform focused on producing an unbiased, simple, economical insurance system offering basic health coverage to all Australians.

After its introduction, Medicare underwent a few significant modifications, including subsidising costly new technologies like PET scans to add preventive health checks and fund new ways to deliver health care, like team care for severe disease management.

4. What Was Before Medicare In Australia?

Before the commencement of Medicare in 1984, several health reforms were introduced by the Australian Health and welfare department. Some of these include:

• 1908: Introduction of elderly and invalid pensions

• 1912: Introduction of a maternity allowance

• 1945: Introduction of sickness and unemployment benefits.

• 1948: Introduction of the Pharmaceutical Benefits Scheme to offer free medicines for pensioners along with 139 'life-saving and disease-preventing medication free of cost for the community.

• 1975: The Whitlam government introduced the first iteration of Medicare as "Medibank."  

At this time, universal healthcare was a relatively new concept, and healthcare was a private affair in Australia. Healthcare quality depends on several factors, such as your place of stay, educational background, and income level.

Later in 1983, the government passed the Health Legislation Amendment Act 1983, and the name Medibank was changed to "Medicare."

Medicare was a controversial political topic at that time, with the government introducing some changes in the scheme in the following areas:

• Limitations in bulk billing and benefits

• Rebates for Medicare holders with private insurance

• How much money would hospitals receive

However, the incoming Hawke Labor government later revoked these changes in 1984.

5. What Does Medicare Cover In Australia?

There are three Medicare benefits categories: hospital, medical, and pharmaceutical.

Hospital Benefits

• Free inpatient treatment as a public patient in a public hospital by a doctor appointed by the hospital

• Home health care 

• Nursing home care

• Skilled nursing facility care

• Hospice care

Medical Insurance

• Consultation fees for healthcare professionals, including doctors and specialists.

• Outpatient care - When visiting a doctor outside a hospital, Medicare reimburses 85% of the Medicare Benefits Schedule (MBS) fee for a specialist's services and 100% for a general practitioner's (GP) services.

• You won't have to pay anything if your doctor bills Medicare directly.

• Tests and examinations conducted by doctors to treat ailments, such as pathology tests, x-rays, etc., 

• Eye tests by optometrists,

• Most therapeutic procedures, including surgeries performed by doctors,

• Approved dentists do specific surgical procedures.

• Certain procedures under the Cleft Lip and Palate Scheme,

• Specific procedures under the Enhanced Primary Care program

• Specific methods for allied health services form a part of the Chronic Disease Management Plan.

• Medically necessary services, including supplies or services required to identify or treat a medical condition that fulfils accepted medical practice standards.

• Preventive healthcare services prevent diseases like the flu or identify the disease at its initial stages when chances are higher to manage it with treatment.

Prescription Drug Coverage

Under Medicare's Pharmaceutical Benefits Scheme, you pay only a portion of the charges of most prescription medicines you buy at pharmacy stores. It includes several recommended vaccines or shots.

Medicare reimburses the remaining cost of the medicine. However, you must present your Medicare card to avail of the PBS benefit.

6. Who Is Eligible For Medicare In Australia?

Medicare is the national public health insurance program for most permanent residents and citizens. To be eligible for Medicare, you must meet the following requirements:
 

1. You are 65 or above

2. You live in Australia, and you are any of these:

• an Australian citizen

• an Australian permanent resident

• a New Zealand citizen

• Have applied for a PR visa that is not a parent visa

• Have a work permit to work in Australia

• Can prove your relationship to a citizen in Australia

• a ttemporary resident covered by a governmental order

3. You are a citizen or permanent resident of any of the below areas:

• Norfolk Island

• Christmas Island

• Cocos (Keeling) Islands

• Lord Howe Island

4. You are visiting Australia from any of the below nations, you may be covered by Australia's Reciprocal Health Care Agreements.

• Slovenia

• Finland

• Belgium

• Italy

• Netherlands

• Malta

• Norway

• New Zealand

• Sweden

• The United Kingdom

• The Republic of Ireland

Each country has a distinct arrangement with the Australian government, so you should determine your coverage under what circumstances.

5. Younger people with specific disabilities

6. People with End-Stage Renal disease, or ESRD

7. Who Is Not Eligible For Medicare In Australia?

As your Medicare eligibility depends on your residency and other factors, people not fulfilling the above criteria are not eligible to enrol in Medicare. 

Moreover, the Victorian healthcare system does not offer Medicare benefits to overseas students as it treats them as private patients.

Thus, students must take out Overseas Health Cover before approving their student visa. It offers hospital and medical fees coverage and subsidies for ambulance transport and medication. 

8. How Does Medicare Work? 

People aged 15 years or more who meet the above criteria can enrol for Medicare and apply for their Medicare card at Services Australia. Parents can register children below 15 years on their parents' cards. All Australian-born babies get automatically enrolled in Medicare.

Upon successful enrolment, you will receive a Medicare number and card. In the case of a parent/ guardian, your Medicare card will display the reference numbers and corresponding names of individual family members under one Medicare number.

You can use your Medicare card to access an array of medical services for free or low-cost throughout the country. You may even download the Express Plus application on your mobile and log in to your "myGov" account to access a digital copy of your Medicare card.

Once you have a Medicare card, you can use it when:

• Filing a Medicare claim for an unpaid or paid doctor's bill

• Visiting a doctor or healthcare professional who bulks bills

• Getting medical treatment as a public patient in a government hospital

• Filling a Pharmaceutical Benefits Scheme prescription at a pharmacy store

Once you claim a medical or health service under Medicare, you receive your Medicare coverage (in the form of a rebate) in two ways:

Original Medicare

• Includes Hospital Insurance and Medical Insurance

• You will pay a deductible at the start of the year on receiving services and 20% of the cost of "Coinsurance," a Medicare-approved service.

Medicare Advantage Plan

• It is an annual Medicare-approved plan from a private insurer that offers a substitute for Original Medicare.

• It includes Hospital Insurance, Medical Insurance, and Prescription Drug Coverage and may offer additional benefits that Original Medicare doesn't cover, such as vision, dental, and hearing services.

• As each plan charges out-of-pocket costs differently, you must learn about the different Medicare Advantage plans and follow their coverage rules.

9. What Does The Interim Medicare Card Cover?

Having a Medicare card or your name imprinted on your parent's/guardian's Medicare card allows you to access public health services and receive medical treatment through Medicare.

You must present the card when you visit a doctor or a hospital or carry out a medical test. A Medicare card partially or fully covers the following:

• Medical services by health professionals, including doctors and specialists (no payment required if your doctor bulk bills) 

• Hospital treatment 

• Eye tests

• Mental health care

• Blood tests, scans, and X-Rays

• Certain dental procedures

• Specific medical procedures under the Cleft Lip and Palate Scheme

• Specific medical procedures under the Chronic Disease Management Plan.

• Several prescription-based medicines 

10. What Is Medicare Benefits Schedule?

The benefits/refunds you receive from Medicare depend on the Medical Benefits Schedule (MBS) fee for that specific service or treatment.

The government allocates the following for each medical service that a healthcare professional offers across the sector and listed in the MBS:

• An item number,

• A descriptor summarising the scope and type of the medical service and relevant medical requirements,

• Reasonable MBS fees, 

• The applicable Medicare benefits, and

• Any extra safety net benefits.

If you hold a Medicare card and an out-of-hospital service is listed on the MBS, you are entitled to receive the following:

• 100% of the MBS fee for GP services

• 85% of the MBS fee for a specialist

• 75% of the MBS fee for in-hospital services 

• You may be granted a higher benefit under one or more Medicare Safety Nets if you spend money higher than the Medicare rebate on out-of-hospital medical tests or appointments. So, when your medical expenses exceed a specific limit, you will receive money from the government to cover your out-of-pocket expenditures.

Here is how much I get back from Medicare's Safety Net arrangements:

• Original Medicare Safety Net (OMSN): You will receive 100% of the scheduled fee for your out-of-hospital services on reaching the OMSN threshold.

• The Extended Medicare Safety Net (EMSN): This benefit is applicable when a patient's out-of-pocket expenditure on out-of-hospital services is more than the yearly threshold. On reaching the threshold, patients get reimbursement of 80% of any additional out-of-pocket expense incurred on out-of-hospital services for the remaining calendar year.

11. What Does Medicare Not Cover Australia?

Just like the benefits, it is essential to know the disadvantages of Medicare when applying for it.

Medicare doesn't pay for all health and medical services. It may pay for some or all of the treatment costs for medical services delivered in public and private hospitals.

Here are some of the costs it doesn't cover:

Hospital

• Private patient hospital costs, including accommodation charges, theatre fees, etc. 

• Hospital and medical expenses incurred outside Australia;

• Hospital and medical services that are not medically essential or cosmetic surgeries; 

• Ambulance transport services

• Emergency department admin or facility fees.

Medical

• Health check-ups for superannuation, life insurance, workers' compensation, memberships, etc., for which an entity other than the insured is accountable such as an employer, compensation insurer, or government authority.

• Ambulance transport services

• Most dental tests and treatments include routine dental visits, fillings, dentures, teeth cleanings, and extractions.

• Additional services such as physiotherapy, physiotherapies, speech therapy, eye therapy, occupational therapy, podiatry, psychology, and chiropractic services

• Acupuncture except when performed as part of a doctor's consultation

• Medical aids such as contact lenses, glasses, hearing devices, etc. 

• At-home nursing services

• Chinese or complementary medicine (unless prescribed by a doctor)

• Several allied health services (except part of a Chronic Disease Management Plan)

12. How To Enrol In Medicare In Australia?

To take advantage of the Medicare benefits, you must complete a Medicare enrolment form and send it (by email/post) along with your documents to Medicare Enrolment Services. You can also apply by visiting in person in a Medicare Office.

If you enrol in Medicare as a family, you must nominate a contact person for your Medicare card. When you only list your name on the Medicare card, you will be the contact person for the card.

List of supporting documents:

• Property - purchase agreement and utility accounts (gas / electricity) in the same name

• Rental property lease agreement and utility accounts (gas / electricity) in the same name

• Proof of employment

• Proof of children at school/university

• Proof of opening an Australian bank account

• Proof of having health insurance with a private insurer in Australia

• Evidence of moving household furniture or goods

• Property / contents insurance.

These documents show that you live in Australia and intend to live there in the predictable future.

13. How Is Medicare Funded In Australia? 

The government funds Medicare through taxes. They impose a Medicare levy on the taxable income of Australian taxpayers. They must pay 2% of their taxable income to help cover costs.

Your financial situation may make you eligible for total exemption or reduction from the Medicare levy.

14. Is Medicare Free in Australia?

No. The government helps fund some of the costs of Medicare through the Medicare levy.

15. What is Medicare Levy?

It is the amount that the government charges working Australians on their taxable income and the tax payable on their income. 

Medicare levy is fixed at 2% of the taxpayer's taxable income. However, pensioners, low-income earners, and families can get exemptions, lower rates, and discounts on medical levies. 

Working Australians who are high-income earners (singles on incomes above $90,000 and families with incomes above $180,000) and don't have a suitable level of private hospital insurance are entitled to pay a Medicare levy surcharge (MLS) on top of the 2% Medical Levy. MLS is an extra surcharge of 1 to 1.5% on their taxable income.

The aim behind charging an MLS is to lower Medicare costs by encouraging them to get an appropriate private health insurance cover (with an excess of $750 or below for singles or $1,500 or below for families and couples) from a registered insurer as they are financially capable of affording it.  

16. How Much Does Medicare Cost Australia Per Year?

The budget 2023–2024 focussed on building a stronger Medicare for all Australians. The Morrison government aimed at delivering critical funding to meet the urgent health needs of today and healthcare improvements for tomorrow.

The government spending on elderly care, health, and sport in 2023-24 is $137.6 billion. It commits to allocating $101.0 billion to health, $563.1 million to sports, $5.7b for a more robust Medicare, and $36.0 billion to elderly care.

Projected investment in different areas of Medicare:

• $3.5 billion towards bulk billing incentives. 

• $358.5 million to open more Medicare Urgent Care Clinics in more places. 

• $143.9 million to provide after-hours primary care.

• MyMedicare will provide new funding packages worth $98.9m to offer comprehensive care to patients who use hospital services frequently and $112.0m for Australians in residential elderly care centres. 

• $98.2 million towards new Medicare rebates. 

• $46.8 million to fund Medicare rebates for care offered by nurse practitioners.

17. Frequently Asked Questions (FAQs)

Do You Have To Pay For Medicare? 

Yes. If you are an Australian taxpayer, you must pay a Medicare levy to the government to help cover some of the Medicare costs. The Medicare levy is at 2% of the personal taxable income. 

Does Medicare Cover Blood Tests?

Yes. Medicare pays for the expenses you incur on performing a blood test.

Does Medicare Cover a CT Scan?

Yes. CT scans are covered, and Medicare reimburses their cost.

Does Medicare cover GP?

Yes.

How Much of a GP Visit Does Medicare Cover?

Under the MBS, Medicare reimburses a 100% scheduled fee for a general practitioner visit.

Does Medicare Cover Eye Tests?

Yes. You can get reimbursement for the cost of eye tests under Medicare.

Does Medicare Cover Surgery in a Private Hospital?

Are you planning to undergo surgery and want to know if surgery is free with Medicare? Medicare fully or partially covers the cost of medically necessary surgeries performed for public patients in public hospitals.

If the MBS lists the procedure, it may cover up to 75% of the surgical costs you are charged as a private patient in a private hospital. 

Medicare classifies surgeries as urgent, elective, or cosmetic. In most cases, Medicare reimburses for medically necessary and emergency (elective or semi-elective) surgeries as long as they are deemed essential for treating your condition. 

However, it will not reimburse for cosmetic surgical treatment. 

What Medical Services are Free in Australia?

Medicare covers free accommodation and treatment for public hospital patients and provides extensive coverage for pharmaceuticals and physician services. It covers only a part of the fees for private patients in public or private hospitals.

How Much is the Average GP Consultation Fee in Australia?

The average consultation charges of a General Practitioner in Australia are around $50 per appointment.

18. Conclusion

Medicare is great for people who migrate to Australia and can achieve permanent residency status to be eligible for it. It gives you a wide range of advantages and covers many expenses which don't require private health insurance.
 

If you still need to apply to this national public health scheme, understanding its benefits and exclusions will help you make an informed decision.

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