Understanding the Australian Healthcare system

In Australia, we’re looked after by a healthcare system that has two parts: a public system and private system.  Both systems can work together effectively to provide Australian Citizens with a holistic approach to their health.

Public Healthcare System

The public system, run by the government through Medicare, is paid for by each and every Australian Tax payer (this is called the 1.5% Medicare levy). It covers things like:

  • seeing a doctor or specialist
  • getting medical tests like x-rays or blood tests
  • taking prescription medicines
  • being treated in a public hospital

There are a couple of things to remember about public healthcare and Medicare:

  •  You won’t pay anything to go to a public hospital, but you might not get to choose which hospital, or which doctors treat you. Also, you might have to go on the Public Hospital Waiting List and wait a while for your treatment – although if it’s an emergency you’ll be treated straight away.
  • Medicare doesn’t usually cover the full cost of doctor’s visits, tests and prescription medicines, so you might have to pay some money towards the cost of these things.


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 healthcare agreements, are eligible for Medicare with some restrictions.


The private, or non-government part of the healthcare system, is made up of private hospitals, private health insurance companies and other health providers like dentists. Medicare doesn’t pay benefits for these.Private Healthcare System

The private healthcare system includes coverage for things like:

  • treatment in a private hospital of your choice
  • Choice of your own doctor
  • Ambulance
  • dentistry
  • eyeglasses and
  • treatments like physio and acupuncture

If you get sick and want or need services like shown above, you can receive treatment through the private health system and pay for them yourself or get private health insurance to help cover the cost.

There are some things to remember about the Private Health Insurance:

  • You won’t have to wait on a Public Hospital Waiting List to attend a private hospital.
  • You can choose which hospital and which doctors treat you
  • Your Health Insurer will cover the cost of your doctor’s fees (if they do not charge above the contracted price.

Healthcare, Government Legislation, and how it affects all Australians.


  • Lifetime Health Cover Loadings – Lifetime Health Cover Loading is Government legislation says that if you are over 30 and taking out private hospital cover for the first time, you may have to pay an extra 2% for each year over 30.  This legislation was introduced back in the year 2000, so if you haven’t had continuous cover since this time,  your Health insurance quote may be increased.
  • Medicare Levy surcharge – The Medicare Levy Surcharge is a Federal Government initiative to encourage higher income earners to take out private health insurance. Under the Medicare Levy Surcharge you may have to pay an extra 1% to 1.5% in tax if your income exceeds certain thresholds and you don’t have appropriate hospital cover. This tax can be removed, should you purchase a Private Hospital Health Insurance policy.
  • Government Rebate– Most Australians with private health insurance currently receive a rebate from the Australian Government to help cover the cost of their premiums. The private health insurance rebate is income tested.