Lyla Lindsey
Medicare is Australia's universal health insurance scheme, providing eligible Australians with free or subsidised health services. The scheme is publicly funded and is managed by the Department of Health, Disability and Ageing, while Services Australia is responsible for claim and registration processing. The federal government provides funding and indirect support for inpatient and outpatient care through the Medicare Benefits Schedule (MBS) and for outpatient prescription medicine through the Pharmaceutical Benefits Scheme (PBS). The MBS lists a standard operating fee for eligible services, and the percentage of that fee that Medicare will pay for. The federal government also funds cancer screening and immunisation programs that are provided free to targeted population groups.
| Characteristics | Values |
|---|---|
| Type of Scheme | Universal health insurance scheme |
| Administered by | The Department of Health, Disability and Ageing |
| Managed by | Services Australia |
| Coverage | Partial or full coverage of most healthcare costs |
| Services | Delivered by state and territory governments or private enterprises |
| Eligibility | All Australian citizens and permanent residents |
| International visitors from 11 countries with reciprocal agreements | |
| Babies born in Australia are automatically enrolled | |
| Benefits Schedule | Lists standard operating fees for eligible services |
| Funding | Funded through the national tax system and a government levy |
| Role of Federal Government | Provides funding and indirect support for inpatient and outpatient care |
| Funds cancer screening and immunization programs | |
| Role of State Governments | Operate their own departments of health |
| Manage hospitals through Local Hospital Networks | |
| Provide free public hospital services, preventive care, chronic disease management, and supplementary mental health care not covered by Medicare |
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What You'll Learn
Medicare is funded by the federal government and taxes
Medicare is Australia's universal health insurance scheme, providing Australians (and some overseas visitors) with free or subsidised health services. Medicare is funded by the federal government and taxes. The federal government contributes to Medicare through general revenues, which are government contributions. The government also collects payroll tax revenues from employers and workers, which are then funnelled into Medicare.
In addition to government contributions and payroll taxes, funding for Medicare also comes from premiums paid by beneficiaries. This includes monthly premiums paid by people with Medicare for medical and drug coverage, deductibles, and coinsurance. Medicare is also funded by taxes on Social Security benefits, payments from states, and interest accrued. The different parts of Medicare are funded in varying ways, and revenue sources dedicated to one part of the program cannot be used to fund another part.
For example, Part A, which covers inpatient hospital stays, skilled nursing facility stays, some home health visits, and hospice care, is financed primarily through a 2.9% tax on earnings paid by employers and employees (1.45% each). Higher-income taxpayers pay a higher payroll tax on earnings of 2.35%. Payroll taxes accounted for 88% of Part A revenue in 2023. Medicare is also funded by the Medicare levy, which is paid for by Australians to help cover the costs of their healthcare.
The Medicare trustees have estimated that an increase in taxable payroll or a reduction in spending would help bring the HI trust fund into balance over the long term. To sustain Medicare in the long run, policymakers may consider broader changes to the program, including reductions in payments to providers and plans, reductions in benefits, and additional revenue sources such as payroll tax increases or new taxes.
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Eligibility for Medicare
Medicare is Australia's universal health insurance scheme, providing Australians with free or subsidised health services. It guarantees all Australians (and some overseas visitors) access to a wide range of health and hospital services at low or no cost.
To enrol, you must be an Australian resident and have a permanent resident visa or have applied for one. Babies born in Australia are automatically enrolled in Medicare and are listed on their parents' card. If you are aged 15 or older, you can apply for your own Medicare card. If you are the only person listed on the card, you will be the contact person for the card. You can also get a digital copy of your Medicare card through the Express Plus Medicare mobile app. To use the app, you need a myGov account linked to your Medicare online account.
If you are enrolling a baby, you can do so in your Medicare online account through myGov. You can enrol your newborn baby by using the Newborn Child Declaration, which you will receive from the hospital. If you have adopted a child or your child was born overseas, you will need to provide additional documents.
You may also be eligible for Medicare if you are visiting Australia from a Reciprocal Health Care Agreement country.
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Medicare card registration
Medicare is Australia's universal health insurance scheme, providing Australians (and some overseas visitors) with free or subsidised health services. The benefits received from Medicare are based on a schedule of fees set by the Australian Government, known as the Medical Benefits Schedule (MBS).
To enrol in Medicare, you need to prove your identity and residency. You can enrol online as an individual or a family through myGov and track the progress. If you are enrolling as a family, you will need to nominate a contact person for the family Medicare card. You will also need to provide details and identity documents for any children under 15.
If your application is approved, you will be contacted with your next steps, and your Medicare card will be sent to you in the mail. You can also get a digital copy of your Medicare card, which you can access through the Express Plus Medicare mobile app. To use the app, you need a myGov account linked to your Medicare online account.
Babies born in Australia are automatically enrolled in Medicare and are listed on their parents' card. If you are aged 15 or older, you can apply for your own Medicare card. You can also enrol your baby when you claim some family payments or by using a form. If your baby was born overseas or you have adopted a child, you will need to provide extra documents.
You can get a new Medicare card if your card expires or is lost, stolen, or damaged. You can also get an extra card.
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Services covered by Medicare
Medicare is Australia's universal health insurance scheme, providing Australians and some overseas visitors with free or subsidised health services. The services covered by Medicare include:
Medical Services
Medicare subsidises consultations with health practitioners, including general practitioners, specialists, and other health practitioners, either in person or via telehealth. It also covers medical imaging and pathology, with the exception of dentistry. Allied health services may also be covered if certain criteria are met, such as being related to a chronic disease.
Hospital Services
Medicare covers hospital services for public patients, including surgical services. However, it does not cover private hospital charges such as accommodation and theatre fees. For private patients, Medicare covers some of the doctor's fees.
Prescription Medicines
Medicare helps with the cost of prescription medicines through the Pharmaceutical Benefits Scheme (PBS). The Life-Saving Drugs Program also pays for specific essential medicines to treat patients with rare and life-threatening diseases.
Mental Health Services
Medicare covers mental health services, including assessments, treatment plans, and medicines. The Better Access Scheme also covers the cost of other mental health supports, such as care from occupational therapists, social workers, general practitioners, and psychiatrists.
Other Services
Medicare also covers eye tests, pathology tests, imaging and scans. The National Immunisation Program covers the cost of vaccines for eligible Australians. Additionally, Medicare provides subsidised hearing services and devices through the Hearing Services Program. The National Bowel Cancer Screening Program and the National Cervical Screening Program offer free screening tests for eligible individuals.
It is important to note that the Medicare Benefits Schedule (MBS) lists all the services covered by Medicare, and some services may have specific criteria for coverage.
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Medicare Safety Net
Medicare is Australia's universal health insurance scheme, providing Australians (and some overseas visitors) with free or subsidised health services. It is funded by Australians through the Medicare levy.
The Medicare Safety Net is a feature of Medicare that helps to lower your out-of-pocket medical costs for out-of-hospital services. The safety net is designed to provide extra support to people with high medical costs. Once you spend over a certain amount in a calendar year (the threshold), Medicare will give you a higher amount back for the rest of the year. This is calculated from 1 January to 31 December.
The threshold amount for the Medicare Safety Net is reviewed each year on 1 January, in line with any rise in the cost of living (consumer price index). If you are an individual, you will automatically get the higher rebate once you reach the threshold. If you are part of a family or couple, you can combine your costs by registering as a family. However, you need to let Services Australia know, so they can record your family's combined expenses.
The Medicare Safety Net applies to out-of-pocket expenses for out-of-hospital services listed on the Medicare Benefits Schedule (MBS). It does not apply to services that are not listed on the MBS or to MBS services delivered in a hospital. The increased benefits apply to either your 'gap expenses' or 'out-of-pocket expenses'. Gap expenses refer to the difference between the Medicare benefit and the schedule fee, while out-of-pocket expenses refer to the difference between the Medicare benefit and what your health practitioner charges.
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Frequently asked questions
Medicare is Australia's universal healthcare insurance scheme funded by Australian taxpayers. It guarantees all Australians (and some overseas visitors) access to a wide range of health and hospital services at low or no cost.
Medicare is funded through a mix of general revenue and the Medicare levy. The Medicare levy is currently set at 1.5% of taxable income with an additional surcharge of 1% for high-income earners without private health insurance cover.
All Australian citizens and permanent residents are eligible to enroll in Medicare, as well as international visitors from 11 countries that have reciprocal agreements for medically necessary treatment. Babies born in Australia are automatically enrolled in Medicare.
