There’s only one thing worse than being ill and that’s figuring out how to pay the medical expenses associated with treatment. Fortunately the Australian health system has a comprehensive insurance system that will help cover at least some of the costs of healthcare.

The system is designed to give all Australians some peace of mind, however, it is not a free system and it is inevitable that if you are faced with health expenses, you will pay some costs. How much will be dependant on what type of health insurance you have.

While the Australian health insurance system is comprehensive, it can be confusing. There are three key planks in the Australian health insurance system. They are:

  • Medicare
  • The pharmaceutical benefits scheme(PBS)
  • Private health insurance.

Medicare is a government administered system covering all Australians for a proportion of most medical expenses. The government will pay 70% of what they call the proscribed fee which is determined by the government.

It is worth remembering that registered health practitioners can charge over and above the proscribed fee, meaning that you will have to pay the difference. Some medical clinics offer bulk billing services. Bulk billing services only charge the government’s proscribed fee, guaranteeing minimal out of pocket cost (30%) to the patient.

You will be eligible for Medicare benefits if you have been granted permanent residency in Australia or if you hold a valid working visa and have applied for permanent residency.

The Medicare system is a great safety net, but it won’t pay all medical costs.

The Pharmaceutical Benefits Scheme is also available to all Australians and has been designed to subsidise the cost of prescription drugs. The system is operated by the Australian government and covers a wide range of medicines and drugs, offsetting their cost but not making them free.

For added protection Australians can elect to take out private health insurance.  There are a number of private Health Insurance companies offering a variety of schemes that insure against various health scenarios. There is also a range of temporary visa programs, such as the Temporary Skills Shortage (TSS) Visa, that require the holder to maintain a private insurance policy during their time in Australia.

The key point to remember when considering private health insurance are:

  • You will be able to use the private health system to access non-essential medical services and treatments.  If you did not have private health care insurance the chances are that you would experience some waiting time before being able to get treatment.
  • You will get some taxation advantages from taking out private health insurance. Citizens who choose not to have private health insurance may have to pay a Medicare surcharge levy.
  • The Medicare surcharge is applied for individuals earning more than $90,000 per year and to couples who are earning more than a combined income of $180,000 per year.
  • There is a Lifetime health cover loading imposed upon people who opt into the private health insurance system later in life. The loading is added to the premium and can be as much as 20%.
  • Even with private health insurance the chances are that you will not be covered for every conceivable medical expense and will still need to meet some out of pocket expenses.
  • There are options to cover dental treatment in private health insurance.
  • Competition in the private health insurance market is fierce and the options for cover are many.  It pays to do your homework and compare health insurance policies as well as premiums to get the best deal for your circumstances.

Everybody’s circumstances are different and the ultimate decision in relation to choosing private health insurance rests with you and your family. Whatever decision you choose to make, you can rest assured that you can access the Australian health system and be covered to meet at least some of the costs of any medical bills during your stay.

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  1. I thought it was very interesting that you mentioned that you get taxation advantages from having a private insurance service. The other night somebody was telling me about bulk billing doctors and how they are trying to find one. In my opinion, this person should look online and try to find the best option for them.


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