Lexi Webster
Australia has a universal healthcare system, which is provided through Medicare. This single-payer system covers all Australian citizens and permanent residents, as well as those from countries with Reciprocal Healthcare Agreements. Medicare covers the cost of GP visits, hospital visits, and some specialist costs, as well as subsidising prescription medications. The federal government provides funding and indirect support for inpatient and outpatient care through the Medicare Benefits Scheme (MBS) and for outpatient prescription medicine through the Pharmaceutical Benefits Scheme (PBS). The MBS has a safety net to ensure that patients pay less for services once they reach a certain amount of out-of-pocket costs. The private healthcare system in Australia is funded by private health insurers and out-of-pocket payments from patients.
| Characteristics | Values |
|---|---|
| Public healthcare system | Medicare |
| Healthcare funding | Government, private health insurers, patients |
| Medicare funding | 2% Medicare levy, Medicare levy surcharge |
| Medicare coverage | Australian citizens, permanent residents, Reciprocal Healthcare Agreement countries |
| Medicare services | Public hospital care, physician services, pharmaceuticals |
| Medicare costs | No cost or low cost |
| Private healthcare system | Private health service providers |
| Private healthcare funding | Private health insurers, patients |
| Private healthcare coverage | Private health insurance, out-of-pocket |
| Government role | Funding, regulation, administration |
| Government funding | Federal, state, local |
| Government agencies | Queensland Health, Therapeutic Goods Administration |
| Government policy | National health policy set by federal Minister for Health |
| Government initiatives | National Disability Insurance Scheme, Medical Research Future Fund |
| Healthcare challenges | Rural and remote areas, mental health of professionals |
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What You'll Learn
Medicare: What is it and who does it cover?
Medicare is Australia's universal healthcare programme, providing medical appointments, medications, and hospital care at low or no cost. It is funded by a 2% Medicare levy on taxable income, with a Medicare levy surcharge for high-income earners without appropriate private patient hospital cover.
Medicare covers all of the costs of public hospital services, including emergency care, and some or all of the costs of other health services. This includes services provided by GPs and medical specialists, as well as some community nursing programs, physiotherapy, and basic dental care for children.
Medicare is available to Australian citizens, permanent residents, and people from countries with Reciprocal Healthcare Agreements. Some visitors and visa holders are also entitled to Medicare coverage, but this is limited to immediately necessary care only. Those eligible for Medicare can access care within the public health system for free or at a lower cost.
The Pharmaceutical Benefits Scheme (PBS), funded by the federal government, is part of Medicare and substantially subsidises a range of prescription medications to make them more affordable. The Medicare Benefits Schedule (MBS) is a list of all health services that the government subsidises, which is kept up-to-date by a team of medical experts.
The private healthcare system in Australia is funded by private health insurers and out-of-pocket payments by patients. The government provides a means-tested rebate to help with the cost of private health insurance, and there are also incentives in place to encourage the uptake of private health insurance.
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The cost of healthcare in Australia
Australia's health system is complex, and so are its funding arrangements. The country's universal healthcare system is funded by the government, individuals, and private health insurers. In 2016–17, Australia spent nearly $181 billion on health, accounting for about 10% of its gross domestic product. This means that for every $10 spent in Australia, $1 went to health.
The federal government provides funding and indirect support for inpatient and outpatient care through the Medicare Benefits Scheme (MBS) and outpatient prescription medicine through the Pharmaceutical Benefits Scheme (PBS). Medicare covers all of the cost of public hospital services and some or all of the costs of other health services, including consultations with general practitioners and specialists, diagnostic tests, and imaging. It is available to Australian and New Zealand citizens and permanent residents in Australia. Some visitors and visa holders are also entitled to Medicare coverage, although cover for international visitors is limited to immediately necessary care only.
The MBS has a safety net to ensure that individuals pay less for services once they reach a certain amount of out-of-pocket costs. The PBS makes some prescription medicines cheaper, and without it, medicines would cost tens of thousands of dollars more.
The government also provides a means-tested rebate to help with the cost of private health insurance, which covers the hospital stay component in private hospitals. However, critics argue that this is an unfair subsidy, claiming that the money could be better spent on public hospitals.
Out-of-pocket payments accounted for 16.5% of total health expenditures in 2016–2017, with the largest share (68%) going to primary care. In 2019, one in three low-income households spent more than 10% of their income on healthcare, and one in four Australians without a health care condition avoided care due to the cost.
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Private health insurance
In Australia, private health insurance is available for those who want cover for more health services and choice. It is not compulsory to take out private health insurance, but it can be beneficial for those who want treatment that Medicare does not cover. Private health insurance policies cover some of the costs of treatment in a private hospital and can also help cover 'extras', such as dental, physiotherapy, optical, chiropractic and podiatry services.
The Australian Prudential Regulation Authority regulates private health insurance, and the Australian Competition and Consumer Commission promotes competition among private health insurers. Private health insurance companies are required to pay benefits for the products listed on the Prescribed List.
The Australian government has introduced initiatives to encourage people to take out private health insurance. The Lifetime Health Cover initiative lets you avoid paying higher premiums for private hospital cover if you take out hospital cover before you turn 31. The government also provides a means-tested rebate to help with the cost of private health insurance.
In 2013-14, approximately 47.2% of Australians had private health insurance with some form of hospital cover.
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$79
The role of the Australian Government
Australia's healthcare system is a mix of public and private services. The public system is funded by local, state and federal governments, while the private system is funded by private health insurers and patient payments. The federal government provides funding and indirect support for inpatient and outpatient care through the Medicare Benefits Scheme (MBS) and for outpatient prescription medicine through the Pharmaceutical Benefits Scheme (PBS). Medicare is a universal healthcare program that covers all Australian citizens, permanent residents, and people from countries with Reciprocal Healthcare Agreements (RHCA). It provides free public hospital care and substantial coverage for physician services and pharmaceuticals. The MBS is a list of all health services that the government subsidises, which is kept up to date by a team of medical experts. The PBS makes some prescription medicines cheaper.
The Australian, state and territory, and local governments share responsibility for running the health system. State and territory governments regulate and administer the major elements of healthcare, such as doctors, public hospitals and ambulance services. The federal Minister for Health sets national health policy and may attach conditions to funding provided to state and territory governments. The funding model for healthcare in Australia has seen political polarisation, with governments being crucial in shaping national healthcare policy.
The Australian government also funds health and medical research through the Medical Research Future Fund and the National Health and Medical Research Council. It subsidises aged care services, funds veterans' healthcare, funds community-controlled Aboriginal and Torres Strait Islander primary healthcare organisations, and maintains the number of doctors in Australia. The government also regulates medicines and medical devices through the Therapeutic Goods Administration (TGA).
The government provides a means-tested rebate to help with the cost of private health insurance, which has been criticised as an unfair subsidy to those who can afford it. In 2013, the government introduced the Lifetime Health Cover loading, where people who take out private hospital insurance later in life pay higher premiums. The government also encourages take-up of private health insurance through the Medicare Levy Surcharge, an additional levy for those on high incomes who do not have adequate levels of private hospital coverage.
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The future of Australian healthcare
Australia's healthcare system is a mix of public and private services, with the public system funded by local, state and federal governments, and the private system funded by private health insurers and patients. The public system is known as Medicare, which is available to Australian citizens, permanent residents, and people from countries with Reciprocal Healthcare Agreements. Medicare covers the cost of public hospital services, GP visits, and some or all of the costs of other health services, including specialists, physiotherapy, community nursing, and basic dental services for children.
The mental health of healthcare professionals is an increasing area of focus, with organisations like Crazysocks4docs Trust Foundation aiming to address the stigma associated with mental health issues in the medical field.
The Australian Digital Health Agency, established in 2016, has implemented a national e-health program, with over 6 million patients and 13.4 million providers registered. This digital strategy supports prescription information, medical notes, referrals, and diagnostic imaging reports, streamlining healthcare processes and improving efficiency.
The Australian healthcare system faces challenges, particularly in providing equitable access to rural and remote areas. The vast size of the country presents difficulties in ensuring uniform healthcare options across all regions. Additionally, there is ongoing political polarisation around healthcare funding models, with governments playing a pivotal role in shaping national healthcare policies.
In conclusion, the future of Australian healthcare will be shaped by technological advancements, a continued focus on mental health support for healthcare professionals, and the expansion of digital health strategies. Addressing disparities in access between urban and rural areas will be a key priority, along with navigating the political landscape to ensure sustainable funding models for both public and private healthcare sectors.
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Frequently asked questions
Medicare is the Australian government's scheme to provide healthcare to Australian citizens, permanent residents, and people from countries covered by Reciprocal Healthcare Agreements. It covers the cost of GP visits, hospital visits, and 85% of specialist costs. It also subsidizes prescription medications to provide them at a discounted cost.
Funding for Medicare is raised by a 2% Medicare levy on taxable income, with an additional Medicare levy surcharge for people on high incomes who do not have appropriate private patient hospital cover. Exemptions and reductions are available for low-income earners.
Medicare covers the cost of public hospital services and some or all of the costs of other health services, including GP and specialist visits, physiotherapy, community nursing programs, and basic dental care for children. It does not cover ambulance services, most dental care, glasses, contact lenses, hearing aids, or cosmetic surgery.
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