Health care in Australia is community rated and is based on two separate but interacting systems:

• Public health insurance provided by Medicare, and
• Private health insurance provided by a number of private health funds.

The cover provided by the public health system is limited, so some health care leads to out of pocket expenses for the patient unless private health insurance covers these additional costs.

Medicare: Public Health Insurance in Australia

Medicare provides free basic and necessary treatment at public hospitals, as well as from specialists and GPs. The Medicare Benefits Schedule (MBS) outlines what’s covered and what isn’t. All the benefits Medicare provides are funded by the government and based on tax contributions from all Australians, as well as an extra Medicare Levy imposed on those earning a high income.

Medicare benefits include treatments from specialists and general practitioners either for free or at reduced cost, depending on the heath care you receive. Participating dentists and optometrists can provide some specified services under the MBS, while the cost of other general or ancillary treatments has to be paid by the patient. Prescription medication costs are subsidised by Medicare’s Pharmaceutical Benefits Scheme to make medicines more accessible to those on a low income.

Who Can Use Medicare

Any Australian resident can make use of the public health insurance scheme as long as:
• They are legal citizens of Australia or New Zealand, or
• They hold a permanent Australian visa, or
• They have applied for a permanent Australian visa (although conditions may apply to this guideline)
Non-resident visitors to Australia from overseas countries that have a reciprocal health care agreement with Australia may also be treated under Medicare.

Private Health Insurance in Australia

A second option for Australians is to take out private health insurance through one of the many authorised private health funds. Subscribing to private funds gives access to broader health care cover than that provided by Medicare.

Private health funds in Australia come under one of the following categories:
• For-profit: Funds that make money by providing health insurance. Examples include MBF Health Fund or the Health Insurance Fund of Australia.
• Non-profit: Funds that do not make any money from the products and services they provide, but instead put all revenues back into the service. Examples include HCF Health Insurance or GMHBA
• Regional: Funds that principally cater to a specific region of Australia. Examples include HBF for residents of Western Australia, or the Territory Insurance Office for the Northern Territory

Medical insurance comparison for Australians must take into account not only the funds, premiums and coverage, but also the government initiatives that may affect the overall long-term costs of private health care. Australians with private health insurance may receive a Private Health Insurance Rebate to help with the costs of their private health care. Meanwhile, the Lifetime Health Cover scheme encourages private health fund membership early in life by charging an additional loading fee to those who take out private hospital cover after they are 30 years of age.

Community-Rated Health Insurance

Private health insurance in Australia is community rated. That means that health insurance premiums are not dependent on the policyholder’s medical history, their current state of health, or their lifestyle. There may be differences in premiums for the same health cover between two different states, but within one community there will be one premium for one level of private health cover. No private health fund may refuse a person a health insurance policy or subscription based on pre-existing medical conditions, race, gender, occupation, or other personal characteristics and pastimes.