What is Medicare?
Medicare is run by the Australian Government and is funded by Australian tax payers. Medicare provides Australians with access to public healthcare and the ability to claim some medical expenses.
Who is covered by Medicare?
Medicare covers people residing in Australia who are Australian citizens, New Zealand citizens or holders of permanent visas.
Some visitors and temporary residents, from countries with which Australia has made reciprocal health care agreements, are eligible for Medicare with some restrictions - visit the Medicare Australia website for more information.
What funds do I contribute to Medicare?
Australian taxpayers contribute a Medicare Levy of 1.5% of their taxable income.
The Medicare Levy Surcharge is an additional 1% in tax that you may have to pay if your annual taxable income is above the Medicare Levy Surcharge thresholds and you do not have an appropriate level of private hospital cover.
For more information about the Medicare Levy Surcharge click here.
What is covered by Medicare?
Benefits covered by Medicare include:
- A stay in a public hospital as a public patient
- Part of the cost of pharmaceutical prescriptions, through the Pharmaceutical Benefits Scheme.
- Part of the cost of GP and specialist consultants through the Medicare Benefits Schedule.
- Part or whole consultation fees for doctors, including specialists.
- Part or the whole cost of tests and examinations by doctors needed to treat illnesses, including X-rays and pathology tests.
- Part or the whole cost of eye tests – undertaken by optometrists.
- Part or the whole cost of psychology services - you must be referred by your GP, psychiatrist or paediatrician to receive the benefits.
What is not usually covered by Medicare?
Items not usually covered by Medicare include:
- Private patient hospital costs (for example, theatre fees or accommodation)
- Dental examinations and treatment
- Ambulance services
- Home nursing
- Physiotherapy, occupational therapy, speech therapy, eye therapy, chiropractic services, podiatry
- Psychology services (unless as part of an agreed procedure referred by your GP, psychiatrist or paediatrician)
- Acupuncture (unless part of a doctor's consultation)
- Glasses and contact lenses
What is the Medicare Benefits Schedule?
The Medicare Benefits Schedule (MBS) is a list of medical procedures, consultations and tests that are recognised by Medicare for a benefit. Each item on the MBS has its own Schedule Fee.
What is the MBS Fee?
An MBS fee is like a 'recommended retail price' that has been determined by the Australian Government for every item listed in the MBS.
For more information about Medicare Benefits Schedule Fees visit the Medicare Australia website.
Does Medicare reimburse all expenses?
No, Medicare does not reimburse all expenses.
When you are treated as a public patient in a public hospital, under Medicare you are not charged for the treatment.
When you visit a doctor outside a hospital, Medicare will usually reimburse:
- 100% of the MBS fee for a general practitioner
- 85% of the MBS fee for a specialist
So if your general practitioner charges the MBS fee you won't need to pay anything. And if your specialist charges the MBS fee then your contribution will be 15% of the cost, this is called the 'gap' (the difference between the MBS fee and what Medicare pays).
What is the ‘gap’?
The ‘gap’ is the difference between the percentage of Medicare benefit you are entitled to and the MBS fee.
What is the ‘out-of-pocket’ cost?
Doctors and specialists can choose to charge more than the MBS fee. When this happens you will need to pay the 'gap' plus the difference between what the doctor or specialist charges and the MBS fee. This is referred to as your out-of-pocket cost.
Example
Lisa hasn’t been feeling that well and had decided to visit her GP for an examination. The Schedule Fee for the visit is $35, and she is entitled to 100% benefit through the MBS. Lisa's doctor charges $60, leaving her out-of-pocket $25.
For more information about Medicare and Australia's Healthcare System
- Visit the Medicare Australia website
- Visit the Department of Health and Ageing website