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The Healthcare System in Australia

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The Healthcare System in Australia

The Healthcare System in Australia

This article will detail the Healthcare System in Australia.

Let’s begin by asking about the kind of healthcare Australia has.

In Australia, both public and private healthcare systems coexist.

The public health system in Australia, known as Medicare (not to be confused with the Medicare program in the United States), offers necessary hospital care, doctor visits, and medication for free or at a significantly discounted cost. It is financed in part by an income tax.

Aside from extra hospital services, the private healthcare system also includes specialized care such as dentistry, ophthalmology, audiology, physiotherapy, nursing, and ambulances. It is run by several medical companies. Australia has a universal healthcare system that is funded by the government and private health insurance. The public healthcare system is called Medicare, and it provides free or low-cost access to a range of health services, including:

  • General practitioner (GP) visits
  • Hospital care
  • Prescription medications
  • Allied health services, such as physiotherapy and psychology
  • Dental care for children under 18 years old

Is healthcare in Australia free?

I guess. Public hospitals in Australia are covered by the free Medicare system, however after that, costs start to rise. A patient must pay in full for some services and medications, while other costs are significantly subsidized.

Further down the page, we go into greater depth about the services that Medicare does not cover. Although residents need to pay for these out-of-pocket, the government provides subsidies on certain things through its Medicare Benefits Schedule (or MBS).

Plus, you might also be able to get reduced costs on some prescription medication through the government’s Pharmaceutical Benefits Scheme (PBS).

How does Australian Medicare work?

Established in 1984, Medicare is Australia’s universal health care scheme. It’s available to:

It follows that although they will have to start paying income tax if they decide to become residents of Australia (more on this below), UK nationals do receive free healthcare there.

What does Medicare cover?

If you’re eligible for Medicare, it will cover you for:

  • Treatment in public hospitals
  • Anything on the government-approved list of medical services, known as the  Medicare Benefits Schedule (MBS). Medicare covers 100% of MBS costs if they come from a GP, and 85% of MBS costs if they come from a specialist
  • Some of the cost of prescription medications on the Pharmaceutical Benefits Scheme (PBS) list, which names over 5,000 medicines
  • Some of the cost of physiotherapy, basic dental care for children, and community nurse services

Additionally, there are MBS and PBS Safety Nets, which make sure that you don’t spend more than a specified sum annually for particular treatments and prescriptions. Medicare does not cover the following;

  • Ambulance services (apart from in Queensland and Tasmania, where ambulances are free to use)
  • Treatment in private hospitals
  • Most dental care
  • Most physiotherapy, audiology, and ophthalmology
  • Most psychological and occupational therapy
  • Home nursing
  • Cosmetic surgery, and any treatment that’s not clinically essential

How is Medicare funded?

An income tax, which for most people is 2%, is used to pay for Medicare. You must pay the Medicare levy if you are an expat living in Australia and are eligible for Medicare.

Nevertheless, depending on your financial situation or the situation of your spouse, you can be qualified for a discount or an exemption.

Your Medicare tax rate may be less than 2% if you make less than AUD$23,226 per year, or AUD$36,705 if you’re a senior or pensioner.

You can use this tool to calculate what your Medicare income levy would be.

What is the Medicare Levy Surcharge?

A bigger fee is paid by those in higher income groups thanks to the Medicare fee Surcharge (MLS). You must pay an additional MLS levy of 1% to 1.5% on top of the usual 2% levy if your annual income exceeds AUD$90,000 (or AUD$180,000 for a pair).

By purchasing private health insurance, you can stay away from the MLS. The main goal of the MLS is to encourage higher earnings to purchase private health insurance. If you have enough medical coverage, your insurer will provide you with a code that you can include on your tax return to avoid the MLS.

If you think private medical insurance is right for you, start building a customized plan with Cigna. With access to a global network of over 1.65 million trusted hospitals and doctors, you can rest assured you’ll be in the right hands.

Do expats and tourists have to pay for Australian public healthcare?

You must contribute to Medicare out of your salary if you migrate to Australia and stay there permanently.

However, if their nation has a Reciprocal Health Agreement with Australia, those who visit Australia merely as tourists or short-term visitors won’t typically be required to pay the Medicare levy and will be eligible to utilize Medicare.

For instance, if you’re going to Australia for a working holiday, you will most likely be a ‘foreign resident taxpayer’, meaning you will not have to pay the Medicare levy.

Is it worth getting private health insurance in Australia?

A common query from immigrants to Australia is “Do you have to buy health insurance?”.

There isn’t a “have” in it. In conclusion, although you are not required by law to get medical insurance in Australia, doing so is a wise decision given that nearly 55% of Australians do. As it might offer additional advantages like:

  • Choice of doctor or hospital
  • Shorter waiting times for elective surgery
  • Extras covers, such as dental care, optical care, and ambulance cover

 

What does Australian medical insurance typically cover?

  • Hospital treatment
  • General treatment (also known as ‘Extras’ or ‘Ancillary’ in Australia, this is a treatment that would typically happen outside of hospitals, such as dentistry, physiotherapy, audiology, and ophthalmology)
  • Ambulances (yes, ambulance transport costs money down here, apart from in Queensland and Tasmania where it is free)

This is why most private medical insurance is divided into two categories: hospital cover and general cover. When it comes to choosing one or the other, general coverage is more common (given Medicare covers hospital care quite extensively), but many people tend to opt for both.

What are the benefits of private medical coverage in Australia?

The Australian Government is aware that the nation’s entire population cannot depend on the public healthcare system in Australia. One such tactic is the Lifetime Health Cover (LHC) fee, which encourages individuals to purchase private medical insurance.

How does it function? An Australian will have to pay a 2% premium rise every year after their 31st birthday if they don’t purchase comprehensive medical insurance before that date. By the time you become 65, this can add up to a 70% surcharge, but it doesn’t go higher beyond that.

The LHC does not apply to new migrants, provided they take out private cover within 12 months after registering for Medicare. So, if you do plan to take out private medical cover for your move to Australia, it’s best to do it sooner rather than later.

No MLS

As we mentioned further up the article, if you’re a higher income earner (i.e. over AUD$90,000 per year), you can avoid paying the MLS by taking out medical cover.

Shorter Waiting Times

Like all public healthcare systems around the world, Medicare makes people wait for treatment. The most recent study by the Australian Institute of Health and Welfare (AIHW) showed that 50% of patients in 2020-21 had operations within 48 days, up from 39 days in the previous year.

Plus, 71% of ‘emergency’ patients were seen within 10 minutes (the recommended time frame for emergencies in Australia).

Comfort and Peace of Mind

This rule applies to private medical insurance anywhere. If you choose private healthcare, you can select the hospital and doctor of your choice (among those associated with your provider) and you won’t have to be concerned about paying astronomical medical fees. Additionally, you’ll probably get a private room to yourself, which is uncommon in public healthcare.

The assurance that you can receive high-quality treatment as and when you need it will provide you with the most comfort.

How many Australians have private health insurance?

It’s common for expats to base their lifestyle decisions in their new country on what the locals do. When in Rome!

Well, when it comes to private health insurance, the majority of the Australian population has decided it’s a sensible purchase. According to the Australian Prudential Regulation Authority (APRA), as of December 2022, more than 14 million people in Australia have general treatment coverage (54.7% of the population).

Meanwhile, more than 11.5 million people in Australia have hospital treatment cover coverage (45% of the population).

How much is private health insurance in Australia?

On average, the cost of private medical coverage for an individual in Australia is AUD$157 per month (according to Finder).

That amounts to around AUD$1,880 in terms of “per year” for hospital treatment coverage.

According to the report, Victoria has Australia’s most costly health insurance, costing AUD$258.77 per month for a gold policy.

The Northern Territory is the least expensive state, with a basic package costing AUD$66.57.

Want to know more about the cost of private health insurance for you and your family in Australia? Start constructing a unique plan with Cigna.

 

Private Health Insurance Rebate

Fortunately, to help you with the cost of private medical coverage, the Australian Government provides a rebate at the end of each tax year. However, it does depend on you having an ‘appropriate level’ of medical cover, which you can learn more about here.

The scheme is income tested, so the higher your income, the lower the rebate you’re entitled to. Use the official Private Health Insurance Rebate calculator to see how much you’d be owed each year.

Mind the gap

You should also be aware of “the gap” when it comes to healthcare prices in Australia. This is the discrepancy between the cost of a doctor’s services and what your health insurance will pay for you.

Importantly, Medicare already covers things like specialist consultations and diagnostic tests in public hospitals; private medical insurance in Australia does not. Medicare does not always pay the full cost of these procedures, so you may be responsible for the balance. No doctor is required to follow the prices listed by the Australian Government as “reasonable” for any procedure or medicine on the MBS and PBS (mentioned earlier).

You will be responsible for the remaining balance if a doctor charges more than what is reasonable and Medicare doesn’t cover the whole cost of a procedure or medicine.

‘Gap cover’ arrangements are included in the plans of certain health insurance, but regrettably, not all treatments and medications are covered by this type of coverage.

Below are some additional details about the Australian healthcare system:

  • Medicare is funded by a combination of general taxation and a 2% Medicare Levy, which is paid by all Australian taxpayers who earn above a certain threshold.
  • The public hospital system is funded by the state and territory governments.
  • Private health insurance is provided by several private health insurance companies.
  • The Australian government provides subsidies for private health insurance, which reduces the cost of premiums for some people.
  • The Australian government also provides several programs to help people who are not covered by private health insurance, such as the Medicare Safety Net and the Pharmaceutical Benefits Scheme.

Conclusion:

Overall, the Australian healthcare system is a good quality and affordable system that provides access to a range of health services for all Australians. However, there are some challenges that the government is currently working on to improve the system.

See Also:

The Australian Government RTP Scholarship

Vice-Chancellors International Scholarships

The Victoria University International Scholarship

Why You Should Have a Multiple Savings Account as a Student

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