A fresh start in the Land Down Under is an exciting prospect. The weather’s hot, the beer’s cold, and the coastal cities are something to behold. 

But before you can focus on the fun stuff, you need to think about the serious stuff like healthcare. On this page, we’ll tell you everything you need to know about the Australian healthcare system, including the ins and outs of Medicare. 

To cut to the chase: yes, private medical cover in Australia is a good idea. More than half of Australians have some form of health insurance, and the country’s public system is pretty stretched. Read on to find out more, or you can start building a customised medical plan with Cigna todayWith over 95 million customers worldwide and a wide range of policy options, Cigna will get you sorted in no time.

Australian Healthcare: Key Stats

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    % of Australians with health insurance
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    Average life expectancy
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    Average no. of days before surgery in public hospital

What kind of healthcare does Australia have?

Australia runs on a blend of public and private healthcare

The public system, known as Medicare (not to be confused with America’s Medicare program), provides essential hospital treatment, doctors appointments, and medicine for free or for a substantially reduced cost. It’s funded by a form of income tax. 

The private system, operated by numerous medical companies, comprises additional hospital services, along with specialist care such as dentistry, ophthalmology, audiology, physiotherapy, nursing care, and ambulances.

Unlike the UK, people in Oz rarely rely solely on public healthcare. They typically take out a medical insurance policy so that they can use a combination of public and private healthcare.

map showing health insurance premiums by state in Australia

Click on the map to open a larger, zoomable version

So, is healthcare in Australia free?

Sort of. The Medicare system ensures that treatment at public hospitals is free, but after that, price tags start to creep in. Certain services and medicines are heavily subsidized, while other things are left entirely for the patient to pay for.

How does Australian Medicare work?

Established in 1984, Medicare is Australia’s universal health care scheme. It’s available to:

This means that UK citizens do get free healthcare in Australia, although they will have to start paying income tax if they become a resident (find out more below).

view of sydney skyline

A view of Sydney, where about 20% of Australians live

What does Medicare cover?

If you’re eligible for Medicare, it will cover you for:

  • Treatment in public hospitals 
  • Anything on the government-approved list of medical services, known as the  Medicare Benefits Schedule (MBS). Medicare covers 100% of MBS costs if they come from a GP, and 85% of MBS costs if they come from a specialist
  • Some of the cost of prescription medications on the Pharmaceutical Benefits Scheme (PBS) list, which names over 5,000 medicines
  • Some of the cost of physiotherapy, basic dental care for children, and community nurse services

There are also MBS and PBS Safety Nets, which ensure that you don’t pay over a certain amount each year on specific treatments and medications. 

What does Medicare not cover?

  • Ambulance services (apart from in Queensland and Tasmania, where ambulances are free to use)
  • Treatment in private hospitals
  • Most dental care
  • Most physiotherapy, audiology, and ophthalmology
  • Most psychological and occupational therapy
  • Home nursing
  • Cosmetic surgery, and any treatment that’s not clinically essential

It is really quite huge we’re talking more than three million square miles. In fact, the distance between Portugal and Ukraine is less than the distance between Sydney and Perth.

How is Medicare funded?

Medicare is funded by a tax on income, which for most people is a 2% rate. If you are a resident expat in Australia and you qualify for Medicare, you’ll have to pay the Medicare levy.

However, you might be eligible for a reduction or an exemption, depending on you or your spouse’s economic circumstances. If you earn less than AUD$26,668 per year, then your Medicare tax rate will be lower than 2%.

You can use this tool to calculate what your Medicare income levy would be.

 

What is the Medicare Levy Surcharge?

The Medicare Levy Surcharge (MLS) ensures that people on higher income brackets pay a larger levy. If you earn more than AUD$90,000 each year (or more than AUD$180,000 as a couple), you have to pay a 1% MLS levy on your income on top of the standard 2% levy.  If your annual income is over AUD$105,000 (or AUD$210,000 as a couple), the MLS rate rises to 1.25% although this is the highest it gets. 

You can avoid the MLS by taking out private medical cover. This is essentially why the MLS exists to push higher income earners into taking out private health insurance. Providing you have sufficient medical cover, you’ll get a code from your insurer which you can enter into your tax return, and this will help you dodge the MLS. 

That’s why we’ve partnered with Cigna for private medical insurance in Australia. With four levels of annual cover to choose from and extra modules for more flexibility, Cigna will sort you out with a plan that suits your needs.

Start building a customised plan with a free quote to protect your most important assets you and your family.

northern territory, australia

Ormiston Gorge in the Northern Territory, Australia’s cheapest state for health insurance premiums

Do expats and tourists have to pay for Australian public healthcare?

If you move to Australia and become a permanent resident there, you will have to pay the Medicare levy on your income. 

However, in most cases, people who go to Australia just as tourists or short-term visitors will not need to pay the Medicare levy, and will be able to use Medicare if their country has a Reciprocal Health Agreement with Australia. 

For instance, if you’re going to Australia for a working holiday, you will most likely be a ‘foreign resident taxpayer’, meaning you will not have to pay the Medicare levy. 

Is it worth getting private health insurance in Australia?

A lot of people moving to Australia have a question to ask: “do you have to buy health insurance?”.

There is no “have” about it. Ultimately, you are not legally obliged to take out medical cover in Australia, but it is a very good idea (almost 54% of Australians have some form of private medical insurance).

What does Australian medical insurance typically cover?

  • Hospital treatment 
  • General treatment (also known as ‘Extras’ or ‘Ancillary’ in Australia, this is treatment that would typically happen outside of hospitals, such as dentistry, physiotherapy, audiology, and ophthalmology)
  • Ambulances (yes, ambulance transport costs money down here, apart from in Queensland and Tasmania where it is free)

This is why most private medical insurance is divided into two categories: hospital cover and general cover. When it comes to choosing one or the other, general cover is more common (given Medicare covers hospital care quite extensively), but many people tend to opt for both.

What are the benefits of private medical cover in Australia?

No Lifetime Health Cover charge

The Australian public healthcare system is obviously not suitable for the entire country’s population to rely on, and the Australian Government recognises this. The Lifetime Health Cover (LHC) charge is one such way to push people into taking out private medical cover. 

How does it work? Well, if an Australian doesn’t take out adequate medical cover before the 1st of July after their 31st birthday, they will face a 2% increase in their premiums every year from then onwards. This can tot up to a 70% surcharge by the time you’re 65, but it doesn’t increase beyond this point. 

The LHC does not apply to new migrants, providing they take out private cover within 12 months after registering for Medicare. So, if you do plan to take out private medical cover for your move to Australia, it’s best to do it sooner rather than later

No MLS

As we mentioned further up the article, if you’re a higher income earner (i.e. over AUD$90,000 per year), you can avoid paying the MLS by taking out medical cover.

Shorter waiting times

Like all public healthcare systems around the world, Medicare makes people wait for treatment. A 2019 study by the Australian Institute of Health and Welfare (AIHW) showed that 50% of patients in 2018-19 had operations within 41 days, an increase from 35 days in 2014-15. 

Plus, no more than 75% of ‘emergency’ patients were seen within 10 minutes (the recommended time frame for emergencies in Australia). 

Comfort and peace of mind

This one applies to private medical cover all over the world. If you go private, you can choose your own hospital and doctor (from those affiliated with your provider), and you don’t have to worry about dealing with huge medical bills. Plus, you’ll likely have your own private room, which is rarely available in public healthcare.

Most importantly, you’ll have peace of mind that you can get good quality care as and when you need it. 

How many Australians have private health insurance?

It’s common for expats to base their lifestyle decisions in their new country on what the locals do. When in Rome!

Well, when it comes to private health insurance, the majority of the Australian population have decided it’s a sensible purchase. According to the Australian Prudential Regulation Authority (APRA), as of December 2019, more than 13.5 million people in Australia have general treatment cover (53.3% of the population). 

Meanwhile, more than 11 million people in Australia have hospital treatment cover (44% of the population).

The name comes from one of the Latin words for southern, australis. It stems from the 2nd century European belief that, somewhere in the southern hemisphere, there was a terra australis incognita (‘unknown southern land’).

How much is private health insurance in Australia?

On average, the cost of private medical cover for an individual in Australia is AUD$166 per month (according to Finder). 

In terms of ‘per year’, that’s roughly AUD$850 for general treatment cover, and AUD$2,000 for hospital treatment cover. 

Based on the study, the most expensive state in Australia for health insurance is Victoria, at AUD$251.45 per month for a combined general-hospital policy, while the least expensive state is the Northern Territory, at AUD$189.11. 

To find out how much private medical insurance will cost you in Australia, start building your own tailored policy with Cigna

Private Health Insurance Rebate

Fortunately, to help you with the cost of private medical cover, the Australian Government provides a rebate at the end of each tax year. However, it does depend on you having an ‘appropriate level’ of medical cover, which you can learn more about here

The scheme is income tested, so the higher your income, the lower the rebate you’re entitled to. Use the official Private Health Insurance Rebate calculator to see how much you’d be owed each year.

Mind the gap

When it comes to healthcare costs in Australia, you should also be mindful of ‘the gap’. This refers to the difference between a doctor’s fees, and the amount that your health insurance will cover you for. 

Crucially, private medical insurance in Australia does not cover services that are already covered by Medicare, such as specialist consultations and diagnostic tests in public hospitals. However, Medicare doesn’t always cover the full cost of these services, leaving you with a remaining fee to pay. 

The Australian Government provides a list of suggested ‘reasonable’ prices for every treatment and medication on the MBS and PBS (discussed earlier), but no doctor is obliged to adhere to these prices. If a doctor charges above the recommended fee   and Medicare doesn’t cover the full cost of a treatment or medication you will have to pay the remainder. 

Some health insurers have ‘gap cover’ arrangements as part of their policies, but unfortunately, not every treatment/medicine is eligible for gap cover.

Advice for expats moving to Australia

Hopefully you’re a little clearer on all things healthcare in Australia. It’s a complicated system, but sort yourself out with the right level of cover and you’ll be tickety-boo. 

Check out these guides to find out more about life in Oz: