Medicare Explained: A Complete Guide for Australians

Medicare is Australia's universal health insurance scheme, providing access to a wide range of health services at little or no cost. Understanding how Medicare works can help you maximise your benefits and reduce your healthcare costs. This comprehensive guide covers everything you need to know about Medicare.

What is Medicare?

Introduced in 1984, Medicare is a publicly funded health insurance system that provides Australian residents with access to free or subsidised healthcare. It is funded through general taxation and the Medicare levy, which is currently 2% of your taxable income for most taxpayers.

Medicare covers a wide range of medical services, including doctor consultations, hospital care, and some allied health services. It is designed to ensure that all Australians can access necessary healthcare regardless of their financial circumstances.

Who is Eligible for Medicare?

You are eligible for Medicare if you are:

• An Australian citizen living in Australia
• An Australian permanent resident living in Australia
• A New Zealand citizen living in Australia
• Applying for permanent residency (with certain restrictions)
• A visitor from a country with a reciprocal healthcare agreement

To access Medicare services, you need a Medicare card. You can apply for a Medicare card at a Services Australia service centre or online through myGov.

What Does Medicare Cover?

Free Public Hospital Treatment

As a Medicare-eligible patient, you can receive free treatment in a public hospital as a public patient. This includes accommodation, nursing care, operating theatre fees, and most medications during your stay. However, as a public patient, you cannot choose your doctor and may face longer waiting times for elective procedures.

Subsidised Doctor Visits

Medicare pays rebates for services listed on the Medicare Benefits Schedule (MBS). When you visit a doctor, Medicare will cover:

• 100% of the MBS fee for GP consultations (if the doctor bulk bills)
• 85% of the MBS fee for out-of-hospital services (if the doctor charges above the MBS fee)
• 75% of the MBS fee for services as a private patient in hospital

Diagnostic Tests and Imaging

Medicare covers many pathology tests and diagnostic imaging when ordered by a doctor. This includes blood tests, X-rays, ultrasounds, CT scans, and MRIs. Some tests may require you to visit a bulk-billing provider to avoid out-of-pocket costs.

Eye Care

Medicare covers eye examinations by optometrists, including routine eye tests. If you need eye surgery, such as cataract removal, Medicare will contribute to the cost when performed by an ophthalmologist.

Understanding Bulk Billing

Bulk billing is when a healthcare provider accepts the Medicare benefit as full payment for their services. When you are bulk billed, you pay nothing out of pocket for that service. The provider bills Medicare directly for the full amount.

Not all doctors bulk bill, and some only bulk bill certain patients such as:

• Children under 16
• Pensioners and concession card holders
• Healthcare card holders
• Patients with chronic conditions

The Medicare Safety Net

The Medicare Safety Net provides additional benefits once your out-of-pocket costs for out-of-hospital Medicare services reach certain thresholds in a calendar year. There are two thresholds:

• Original Medicare Safety Net: After you or your family's gap payments reach this threshold, Medicare will pay 100% of the schedule fee for most out-of-hospital services for the rest of the year
• Extended Medicare Safety Net: Once your out-of-pocket costs exceed this higher threshold, you receive an additional benefit of 80% of your out-of-pocket costs (subject to caps)

The exact threshold amounts are adjusted annually. Families can register together to reach thresholds faster.

What Medicare Does Not Cover

While Medicare covers many healthcare services, there are some important exclusions:

• Private hospital costs: If you choose to be a private patient, you will have gap payments unless you have private health insurance
• Dental services: Most dental work is not covered, though there is a Child Dental Benefits Schedule for eligible children
• Optical: Glasses and contact lenses are not covered
• Most allied health: Services like physiotherapy, psychology, and podiatry are generally not covered unless part of specific programs like chronic disease management
• Ambulance: Medicare does not cover ambulance services (arrangements vary by state)
• Cosmetic procedures: Elective cosmetic surgery is not covered

Chronic Disease Management

If you have a chronic condition, you may be eligible for a GP Management Plan (GPMP) and Team Care Arrangements (TCAs). These allow you to access Medicare-subsidised allied health services, including up to 5 visits per year to providers such as physiotherapists, dietitians, and psychologists.

Your GP can assess whether you are eligible and prepare the necessary care plans.

Mental Health Services

Medicare provides support for mental health through:

• GP mental health treatment plans
• Up to 10 Medicare-subsidised sessions with a psychologist or other eligible mental health professional per calendar year
• Psychiatrist consultations with a referral from your GP

How to Maximise Your Medicare Benefits

• Find bulk-billing doctors when possible using our GP directory
• Register for the Medicare Safety Net if you have regular medical expenses
• Ask about chronic disease management plans if you have ongoing health conditions
• Keep your Medicare details up to date in myGov
• Use Medicare-approved providers for diagnostic services when possible