Medicare is Australia’s health care system that provides free or low-cost hospital, medical and optometrical services to all Australian citizens. The benefits you’ll receive are based on a scheduled fee set by the Australian Government. While Medicare provides access to free treatment as a public patient in a public hospital, you are also free to choose Private Health Insurance.
What is Medicare in Australia?
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The health fund is jointly funded by the Australian Government and your compulsory Medicare Levy. The levy is added to your tax assessment and based on your income.
Medicare also provides you access to subsidised treatments by doctors, some specialists and participating optometrists and dentists (specified services only). However, it’s important to know that Medicare does not cover everything.
Whether your choose Medicare alone or combine it with private health insurance, make sure that you base your decision on your specific needs and circumstances.
Who is eligible to receive it?
You are eligible to receive Medicare if you:
- Are a permanent Australian resident.
- An Australian or a New Zealand citizen.
- Have a permanent resident visa.
- Have a Resident Return visa.
- Have applied for a permanent resident visa and hold a valid visa with permission to work in Australia.
- Have applied for a permanent resident visa and hold a valid visa with a parent, spouse or child who is an Australian citizen or has permanent resident status.
- Hold a temporary visa and live in a country that has a Reciprocal Health Care Agreement with Australia.
- Are covered by a Ministerial Order.
How to enrol in Medicare
If you are over the age of 15, you must visit a service centre and enrol in person.
- Step 1: Check to see if you’re eligible to receive Medicare.
- Step 2: Compile valid documentation. If you’re an Australian citizen and applying for the first time, you need to provide your passport, birth certificate, driver’s licence, marriage certificate (if married), change or name certificate and proof of age card. You must also provide two documents proving you live in Australia.If you are a migrant and have or applied for permanent residency, you must also provide a valid visa and any associated documents from the Department of Immigration and Citizenship.
- Step 3: After that, you need to complete the Medicare enrolment application form and submit your application with the required documentation to the service centre. If you live in a remote area or sickness/injury prevents you from personally visiting a service centre, you can post your application.
- Step 4: You’ll receive your Medicare card within 3 to 4 weeks. Make sure all the details on your card is correct and reflects your current address, so you can receive all important information.
- Step 5: Present your Medicare card or card number when you visit a doctor, choose treatment in a hospital as a public patient, claim cash benefits from a Medicare office and when you have your prescription filled at a pharmacy.
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How does Medicare work?
You are eligible for subsidised treatment when you are a Medicare card holder. The public health fund covers a wide range of health care services, both in-hospital and out-of-hospital. These services are usually privately provided, and you pay the providers on a fee-for-service basis. What you’ve paid will then be fully or partially reimbursed by the government.
Each service is assigned a Medicare Benefits Schedule (MBS) item number. The MBS is a document published by the government to stipulate what doctors’ consultation fees should be. The document includes a comprehensive listing of all contracted medical providers and suppliers used by Medicare.
The CMS (Centre for Medicare and Medicaid Services) sets the Medicare fee schedule. This gets done through federal legislation and can change annually, depending on decisions made by the Australian Medical Association.
The Medicare Benefits Schedule fee generally falls into 3 categories:
- Hospital care: Free or subsidised treatment and accommodation in public hospital. Your attending doctor will be appointed by the hospital.
- Medical: 100% reimbursement of the Medicare Benefits Schedule fee if you visit a doctor outside a hospital. You also get 85% back if you see a specialist outside the hospital.
- Optometrical services: You can claim Medicare benefits for services by an optometrist in relation to a consultation on ocular or vision problems or related procedures.
|Medicare Category||What is covered by Medicare?||What is not covered under Medicare?|
|Hospital|| || |
|Medical|| || |
|Optometrical services|| || |
Medicare will also not pay for examinations for superannuation, life insurance or memberships for which someone else is responsible e.g. a compensation insurer, employer or government authority.
Medicare Safety Net
The Medicare Safety Net stops your medical expenses from spiralling out of control. You’ll receive a higher benefit for out-of-hospital medical expenses once your reach a Medicare Safety Net threshold.
Your Medicare Safety Net threshold is worked out annually. Medicare combines your medical costs so that you can reach your threshold sooner. When you reach it, you become eligible to receive a higher benefit for the rest of that year. When you are close to reaching your threshold, medicare will contact you.
There are two types of Safety Nets:
In order to make use of this benefit, you need to be registered with Medicare Safety Net.
- Singles, without dependent children, are automatically registered.
- Families and couples need to register as a family by filling in the relevant form.
However, if you have received more than one service per visit, you may not be bulk billed for everything. Also, be aware that your Doctor might charge more than the Medicare Benefits Schedule, meaning you will have to pay the shortfall.
If this happens, you may claim back some of the costs as a rebate. The easiest way to do this is to submit a claim at your doctor. Alternatively, your claim can be submitted by using your Medicare Online Account or your Express Plus Medicare Mobile App.
To submit a claim you must have:
- A myGov account linked to Medicare,
- A Medicare card,
- Up-to-date Medicare details and cards and
- The doctor’s receipt for the items you wish to claim for.
Essentially, when your doctor bulk bills, he is billing Medicare the MBS fee for a consultation. If bulk billing does not take place, you can claim 100% of the MBS fee from Medicare. For non-GP services, Medicare covers 85% of the MBS fee as a rebate. You will have to pay the rest, known as the gap fee.
When you require complex care like diabetes, cancer and ischemic heart disease, or have a chronic condition (longer than 6 months), Medicare gives rebates. Your visits will then be registered by allied health professionals if you have been referred by your GP.
There are three ways in which you can get an exemption from paying the Medicare Levy. This applies if you:
- are a foreign resident
- meet specific medical requirements
- are not entitled to Medicare benefits
If you qualify for the exemption, make it clear on your tax return.
Medicare Levy Surcharge 2017
The Medical Levy Surcharge is meant to encourage you to take out Private Hospital Cover. This is to help reduce the demand on the public health system. By buying a private policy, you are not only guaranteed to not pay MLS, but you can have peace of mind knowing that you are covered for any emergency.
How is the Medicare levy surcharge calculated?
The surcharge is calculated at a rate of 1% to 1.5% of the tax payer’s income. This is in addition to the Medicare Levy of 2%, which is paid by the majority of Australians.
|Description||Base Income Tier||Tier 1||Tier 2||Tier 3|
|Singles||$90,000 or less||$90,001 to $105,000||$105,001 to $140,000||$140,001 or more|
|Families||$180,000 or less||$180,001 to $210,000||$210,001 to $280,000||$280,001 or more|
|Medicare Levy Surcharge %||0%||1%||1.25%||1.5%|
The Australian Taxation Office produces tax calculators that help you estimate your tax payable. Although additional information may be required, the information you’ll generally need include:
- The total gross income of payments you have received
- Total amount of tax withheld
- Your physical address
- Full amount of deductions to claim
- Details of your tax credits
- Any tax offsets you are entitled to claim
You can claim your rebate through a reduced premium or your tax return with the ATO (Australian Taxation Office). Should you choose to receive your rebate through your insurer, your insurer will help you nominate the category you fall into, so that you can avoid a tax liability. Alternatively, you can fill out the Medicare rebate claim form.
Do I have to pay Medicare Levy surcharge on a 457 visa?
If you have a 457 visa and come from a country with a reciprocal health care agreement, you can avoid paying the Medicare Levy surcharge. To do this, you have to invest in private health insurance.
Do pensioners pay Medicare levy?
Yes, pensioners do have to pay the Medicare Levy, although they only pay part of it. If your pension is less than $42,172 per annum, you do not have to pay it in full. You pay a lower rate. If, however, your pension is below $33,738 a year, you will be exempt from having to pay any Levy fees.
Although Medicare offers adequate benefits, the option of having additional private health insurance is always available if you need it. Not only will you help alleviate the pressure on the public health system, but you will save money come tax season and have total peace of mind knowing you are covered for whatever might happen.
- How to avoid the 2% health insurance loading before your 31st birthday. Plus, find out how the LHC loading works when overseas or immigrating to Australia.
- Find out how you can reduce your private health insurance premium with the Australian Government Rebate. Uncover how big your discount or refund will be.
- Find out if you have to pay the 2% Medicare Levy & up to 1.5% Medicare Levy Surcharge (MLS) or whether you’re eligible for an exemption. Calculate your MLS!