Telehealth, which became a permanent part of Medicare in 2022, has played a transformative role in enhancing patient access to care. With the implementation of new reforms and Medicare Benefits Schedule (MBS) updates in 2025, including fee indexation, expanded telehealth options for chronic condition management, and modifications to bulk-billing and consent requirements, there are more opportunities than ever for families to manage out-of-pocket expenses. These reforms, combined with digital health tools, promise to further reduce costs for households and make healthcare more accessible, efficient, and affordable.
Key facts
- Australians still face significant out-of-pocket costs for health care, even with Medicare and private insurance, particularly for services not fully covered by Medicare.
- Telehealth reforms in 2025, including new Medicare items and MyMedicare registration, aim to reduce costs and improve access to healthcare, particularly for chronic conditions and remote consultations.
- Cost-saving strategies such as using the right private insurance, telehealth, generic medications, and Medicare Safety Nets can help minimize out-of-pocket expenses.
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Understanding Australia’s Health‑care Landscape
Medicare Basics
Medicare, Australia’s universal healthcare system, provides government-funded coverage for a range of essential services. It covers the majority of general practitioner (GP) visits, hospital treatments, and some diagnostic tests. However, while Medicare significantly reduces healthcare costs, it does not cover everything. Many services, such as dental care, elective surgeries, and private-hospital charges, often incur additional costs, leaving patients responsible for out-of-pocket expenses.
Private Health Insurance and “Extras”
Private health insurance complements Medicare by providing coverage for hospital services, including access to private hospitals, a wider choice of doctors, and shorter wait times. In addition, it covers “extras” such as dental, physiotherapy, optometry, and alternative therapies. However, policies vary widely in terms of coverage and cost, which means it’s crucial for individuals and families to select a plan that best suits their health needs and financial situation.
Typical Out‑of‑Pocket Expenses
- Co-payments and gap fees (the difference between the scheduled fee and what Medicare/private insurers pay)
- Services not covered by Medicare, such as dental care, physiotherapy, and alternative therapies
- Brand-name medications that are not fully subsidised under the Pharmaceutical Benefits Scheme (PBS)
How Telehealth Works and Why It Matters
Telehealth refers to the delivery of healthcare services remotely, via phone or video consultations, allowing patients to receive medical care without needing to be physically present. This form of healthcare delivery is especially beneficial for consultations where a physical exam is not required. Various healthcare providers, including GPs, specialists, allied-health professionals, and nurse practitioners, are able to deliver telehealth services, making healthcare more accessible for those who may have difficulty traveling to a clinic or hospital.
Benefits for Patients
The introduction and expansion of telehealth services have provided numerous benefits for patients, particularly those in rural and remote areas who traditionally face barriers to accessing care. By reducing the need for travel, telehealth cuts down on associated costs such as fuel, parking, and time off work. It also facilitates quicker access to mental health support and specialist consultations. Furthermore, telehealth reduces the risk of infection during outbreaks by minimizing in-person visits.
Telehealth Services Available
- Video consultations
- Phone consultations
- Remote monitoring
- Online prescriptions and referrals
- Mental health support
Upcoming Telehealth Changes for 2025
July 2025 MBS Updates
Starting in July 2025, the government will apply an annual fee indexation to most general medical services and diagnostic imaging items, increasing by 2.4%. New telehealth items will allow GPs and prescribed medical practitioners to prepare and review chronic condition management plans remotely. Additionally, there will be new and amended telehealth items specifically for specialists, offering even more opportunities for patients to access care remotely.
MyMedicare and the 12‑Month Rule
The “established clinical relationship” rule, which previously required patients to see their GP in person within the last 12 months to be eligible for telehealth services, will change in November 2025. Under the new system, patients who are registered with their GP practice through MyMedicare can access telehealth services without having to meet the in-person requirement. This change will help improve continuity of care and discourage the use of “pop-up” telehealth services that do not maintain long-term relationships with patients.
Changes to Specific Telehealth Items
Mental-health telehealth items will remain permanent as part of the Medicare Benefits Schedule. Additionally, telehealth services related to blood-borne viruses and sexual-reproductive health will continue to be exempt from the established clinical relationship rule. However, temporary exemptions for pregnancy counselling ended in July 2024, and future telehealth consultations will need to meet the standard clinical relationship requirements.
Bulk‑Billing and Consent Requirements
For telehealth services to be bulk-billed, patients must assign their Medicare benefit to the provider, and the provider must obtain written, email, or verbal consent before claiming the benefit. This change will provide more transparency and ensure that both parties are aware of the billing process. While verbal assignment is a temporary option, it still requires an approved electronic form to be completed and sent to the patient.
Key Telehealth Changes in 2025
Change | Effective Date | Implications |
New chronic condition management telehealth items | 1 July 2025 | Remote management plan preparation and review for chronic conditions |
MyMedicare registration substitutes 12-month rule | 1 Nov 2025 | Registration with a GP practice enables telehealth access without face-to-face consultation |
Mental-health telehealth items permanent | 1 July 2024 | Ensures continued access to mental-health care |
Pregnancy counselling exemption removed | 1 July 2024 | Telehealth must meet clinical-relationship requirements |
Bulk-billing consent rules | Ongoing | Providers must obtain patient consent before claiming bulk-billing |
Government Programs and Safety Nets
Medicare’s safety nets provide additional financial assistance once a patient’s out-of-pocket or gap expenses exceed certain thresholds. There are two safety nets: the Original Medicare Safety Net, which covers gap expenses, and the Extended Medicare Safety Net, which covers out-of-pocket expenses for out-of-hospital services. Once a threshold is reached, Medicare offers higher rebates for further expenses.
2025 Thresholds
In 2025, the thresholds for the Original Medicare Safety Net are set at $576. For the Extended Medicare Safety Net, the thresholds are $834.50 for concession cardholders and families receiving Family Tax Benefit Part A, and $2,615.50 for others. Once these amounts are reached, Medicare will cover 80% of further out-of-hospital out-of-pocket costs, up to a set cap. Families should consider registering together to combine their expenses and reach the threshold faster.
Choosing and Using Private Health Insurance
Selecting the right private health insurance policy is essential for minimizing out-of-pocket costs. Families should compare hospital and extras cover based on their specific health needs, waiting periods, premiums, and policy restrictions. Policies that offer gap cover or “no-gap” arrangements can significantly reduce out-of-pocket expenses by covering the difference between the scheduled fee and the doctor’s charges.
Medical gap cover helps pay the difference between the Medicare benefit and the doctor’s fee. Some health funds offer gap cover up to the Australian Medical Association fee schedule, potentially eliminating out-of-pocket costs entirely. It’s essential for patients to inquire with their health provider about “no-gap” or “known-gap” arrangements before undergoing treatment.
Tips for Working with Your Health Fund
- Check whether your doctor participates in the insurer’s gap scheme.
- Request informed financial consent before treatment.
- Consider extras cover for dental, optical, and physiotherapy.
- Review your policy annually and understand the waiting periods for pre-existing conditions.
Strategies for Minimising Out‑of‑Pocket Costs
Using the System Wisely
To minimize out-of-pocket costs, patients should obtain cost estimates before treatment and explore public versus private options. Choosing in-network providers and asking about bulk-billing or no-gap billing options can also help reduce unexpected expenses. Additionally, preventive care can identify health issues early, reducing the need for costly treatments later.
Leveraging Telehealth
Telehealth consultations can save patients money by reducing travel, parking, and time off work. Medicare rebates apply when patients meet the eligibility criteria, and registering with MyMedicare can unlock longer consultations and higher bulk-billing incentives.
Using Generic Medicines and PBS
Choosing generic medications over brand-name drugs can significantly lower out-of-pocket expenses, especially when the Pharmaceutical Benefits Scheme (PBS) subsidy is partial. Patients should ask doctors or pharmacists for generic alternatives and inquire about the possibility of renewing prescriptions via telehealth for added convenience.
Joining Medical Gap Networks
Some insurers, such as GU Health, offer networks where doctors accept the scheduled fee as full payment, resulting in no additional costs for the patient. For doctors who charge a known gap, the insurer may cap the additional fee, providing further cost savings.
Telehealth and Digital Tools for Cost Savings
Expanded Digital Services
Telehealth now includes a range of digital health services such as remote monitoring, mental health counseling, chronic disease management, and online prescriptions. These services reduce the need for hospital visits and allow for early intervention, potentially preventing more costly treatments down the line.
Role of Apps and Platforms
Apps like My Health Record and digital appointment portals are essential for managing health care more efficiently. Prescription tracking apps can also help patients monitor medication costs and ensure they stay on top of their prescriptions. Utilizing resources from the Australian Digital Health Agency can help patients better understand how telehealth works.
Future of Digital Health
Advances in digital health technologies, such as artificial intelligence, wearable devices, and remote diagnostics, have the potential to further reduce healthcare costs by enabling earlier detection of health issues and supporting home-based care. Staying informed about these innovations will be crucial for Australians looking to minimize their healthcare expenses.
Frequently Asked Questions and Answers
What are out‑of‑pocket costs, and why do they occur?
Out-of-pocket costs are expenses that patients must pay directly after Medicare and private insurance have made their contributions. These costs include co-payments, gap fees (the difference between what Medicare/private insurers pay and the doctor’s fee), and services not covered by Medicare, such as dental or physiotherapy. They occur because healthcare funding in Australia is shared between the government, insurers, and individuals, and providers may charge more than the scheduled Medicare fee, leading to additional expenses for patients.
How will telehealth eligibility change in 2025?
In 2025, new telehealth MBS items will allow GPs and some specialists to manage chronic condition plans remotely. Additionally, the “established clinical relationship” rule will be linked to MyMedicare registration, meaning patients who are registered with a GP practice can access telehealth services without the need for a recent in-person consultation. These changes aim to make telehealth more accessible and convenient, particularly for patients in remote areas or those with chronic conditions.
Do I need to register with MyMedicare to use telehealth?
While registering with MyMedicare is not mandatory, it offers several benefits. If registered, patients can access longer telehealth consultations and avoid the 12-month in-person visit requirement, making healthcare more convenient. Unregistered patients can still use telehealth services, but they must meet standard eligibility requirements, such as having a recent face-to-face consultation with their GP.
How does the Medicare Safety Net help reduce my medical bills?
The Medicare Safety Net provides additional financial assistance once a patient’s out-of-pocket or gap expenses exceed certain thresholds. Once these thresholds are met, patients are eligible for higher rebates, helping cover more of their healthcare costs. The Original Safety Net covers gap expenses, while the Extended Safety Net covers out-of-pocket costs for certain services, reducing the financial burden on patients who require frequent medical treatment.
What is medical gap cover, and how can it eliminate my out‑of‑pocket costs?
Medical gap cover is a benefit provided by health insurers that covers the difference between the Medicare benefit and the doctor’s fee. Some insurers offer “no-gap” arrangements, where the insurer covers the entire cost, eliminating out-of-pocket expenses. For doctors who charge more than the Medicare rate, insurers may offer “known gap” cover, which caps the extra charges, significantly reducing or eliminating additional costs for patients.