Medicare ensures that all Australians receive free public healthcare. But when is it not enough? The private healthcare system, which funds around a third of all healthcare in the country, can grant patients access to certain treatments and options that Medicare doesn’t cover. It is critical to your personal health, and the health of those around you, to be informed about the pros and cons of each system.
- 1 What Does Medicare Cover?
- 2 When Is Medicare Not Enough?
- 3 What Does Private Health Insurance Cover?
- 4 Are There Additional Perks to Private Insurance?
- 5 What Is the ‘Gap’?
What Does Medicare Cover?
Medicare is free to all Australian citizens. As a public patient under Medicare, you qualify for the following treatments:
- Free treatment as a public patient in a public hospital
- Free or subsidised treatment by allied health professionals such as doctors, specialists, and optometrists
- Free tests and examinations, including x-rays and pathology tests
- 100% of prescription medicine costs and most immunisations
- 75% of the Medicare schedule fee for services and procedures if you are a private patient in a public or private hospital
When Is Medicare Not Enough?
Although Medicare covers a wide range of general treatments, it does leave a few gaps in the public healthcare system.
Here are the main services Medicare does NOT cover:
- Out-of-hospital treatments like physio, chiro, most dental treatment, optical appliances, podiatry, psychology, etc.
- Non-life-threatening cases such as major surgeries and non-emergency transplants
- Choice of doctor, hospital, or treatment date
Many people rely on private health insurance to access services they wouldn’t otherwise be able to afford. It also offers more flexibility under the Medicare system–for example, if you have private insurance, you can elect to be treated as a private patient in a public hospital or a public patient in a private hospital. You can even access certain subsidised or free out-of-hospital medical services under Medicare.
You may want to consider private insurance if you think you will require a non-emergency treatment such as knee surgery but don’t want to wait several months or years to be treated. If you value the freedom to choose your own doctor or schedule the date of your treatment, you may want to consider private care in addition to Medicare.
What Does Private Health Insurance Cover?
There are two types of private health insurance available in Australia: hospital cover and general treatment cover (also called ancillary or extras cover).
General Treatment Cover
General treatment can cover offer out-of-hospital services that are generally not funded by Medicare, such as:
- chiropractic treatment
- home nursing
- occupational therapy
- speech therapy
- glasses and contact lenses
- hearing aids, glucose monitors, and other medical appliances
- acupuncture, remedial massage, and other alternative therapies
Hospital Treatment Cover
Hospital treatment pays for some or all of the costs of hospital treatment as a private patient:
- doctors’ fees and hospital costs, including accommodation and theatre
- your choice of hospital and doctor within the hospital
- shorter wait times for surgery and greater flexibility in scheduling procedures
- increased likelihood of having your own room to recuperate
Some private health insurers offer packaged products that cover both hospital and general treatment services.
Are There Additional Perks to Private Insurance?
In addition to a wider range of treatments, private healthcare offers several advantages to patients who might otherwise miss out under the Medicare scheme:
Avoid the Medical Levy Surcharge
Simply by having private hospital cover, you can avoid what’s called the Medicare Levy Surcharge. For example, while most Australians contribute to the Medicare levy in order to fund the public health system, high-income patients may be charged additional fees. As a private patient, you may be able to avoid these extra charges.
Get the Best Premium
Similarly, if you decide to pay for hospital cover with an Australian registered health fund on your Lifetime Health Cover at an early enough age, you can avoid a 2% loading on top of your premium for every year you are aged over 30.
Receive Higher Rebates
Depending on your coverage history and income, Australians with private health cover receive rebates of up to 25% on premiums while older Australians receive even higher rebates (up to 30% for those aged 65 and above to maximum of 34% for those 70 and above).
What Is the ‘Gap’?
Naturally, every system has its drawbacks. In the case of private insurance, you may experience something called a ‘gap’ when your doctor charges extra fees outside of the Medicare Benefit Schedule (MBS) fee.
By law, health insurance cannot cover doctor or specialist consultations outside of hospital. This means that when you visit a doctor outside a hospital, you’ll be covered for 75% of the cost by Medicare and 25% of the cost by your private insurance.
If your doctor charges extra fees, however, your private insurance may not cover it and you may face an out-of-pocket expense. This is called a ‘gap’.
Insurers can inform you whether they offer private health insurance that covers you for all or part of the gap. They can provide you with details of the doctors and hospitals they have agreements with to cover the gap.
Beyond the general pros and cons outlined in this guide, the decision to buy private insurance is ultimately a personal one. Health care needs vary from patient to patient depending on age, condition, and financial situation. Stay up-to-date on the latest policies and regulations in order to better inform your decision.