What You Need to Know About PBS and non-PBS Pharmaceuticals

Published: February 15, 2019

If you’re an Australian resident or a visitor from a country with a Reciprocal Health Care Agreement (PHCA), you’ll generally only pay part of the cost for prescription medications listed on the Pharmaceutical Benefits Scheme (PBS).

However, you might want to get private health insurance to cover medicines not listed on the PBS, or if you're an overseas visitor from a country without an RHCA, you'll typically need health insurance to help you cover pharmacy costs.

Find out what the scheme covers, how it works, it's safety net threshold, and whether you'll need private health insurance to help you cover expensive non-PBS items.

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What is the pharmaceutical benefits scheme (PBS)?

The Pharmaceutical Benefits Scheme (PBS) is an Australian Government program that subsidizes medicines to everyone that has a Medicare card and those visiting from countries with a Reciprocal Health Care Agreement (RHCA). The purpose of the PBS is to provide you with reliable, timely and affordable access to prescription medicines.

Who is eligible for PBS?

Generally, Australian residents with a Medicare card and overseas visitors from a country with a Reciprocal Health Care Agreement qualify for the Pharmaceutical Benefits Scheme and will receive subsidised medications. You can prove eligibility by representing your script and Medicare card or passport to the pharmacist

If you have an entitlement – or health care card, you might be eligible to receive further concessions, making your PBS medicines even cheaper. To be eligible, you need to hold one of the below concession cards:

  • Concession Pensioner Card
  • Commonwealth Seniors Health Card
  • A Health Care Card
  • Department of Veterans Affairs White, Gold, or Orange Card

Important: Sometimes you might not qualify for the subsidy due to other factors, for example, your age, gender, health and medical history. It's important to confirm your qualification with your medical practitioner when they write you a prescription.

How does the Pharmaceutical Benefits Scheme work?

In Australia, prescriptions are generally divided into two categories:

  1. PBS: Medications listed on the PBS will be subsidised by the government, with the costs being paid directly to the Pharmacy. The schedule list of all medicines covered by the PBS is updated monthly and can be found on their website.
  2. Non-PBS: The Australian Government does not subsidise medications not listed on the PBS, and you'll need to pay full price.

The cost of PBS medicines

How much you’ll pay for medicine under the Pharmaceutical Benefits Scheme depend on various factors, including:

PBS Co-payments

While the government contributes to the bulk of the cost, you must still pay a certain amount towards the cost of your PBS medicines. These co-payments are indexed annually with inflation, rising on the 1st of January every year.

As of January 2019, you’ll pay up to $40.30 for most PBS prescriptions, or $6.50 if you have a relevant concession card. However, pharmacists do have the option to provide you with a discount on your co-payment, up to $1.00, but this is not mandatory.

PBS safety net

The safety net helps you pay a reduced price for prescription medications after you've reached a specific spending limit in a calendar year. If you have a partner, de facto partner and/or children under the age of 16 or under the age of 25 and a full-time student, you can all work together towards the same safety net threshold.

When you or your family reach the PBS threshold, you are generally entitled to discounted co-payments for the rest of the calendar year. If you have a relevant concessions card and reach your threshold, you might get listed medications free for the remainder of the year.

Patient type 2019 PBS safety net thresholds
General patient $1550.70
Patient with a concession card $390.00
Source: The Pharmaceutical Benefits Scheme website (February 2019)

Take note: Only qualifying prescriptions will generally count toward your safety net threshold. Meaning, the total of your co-payment amounts, less the discounts. However, medicines not dispensed through the PBS but filled at outpatient pharmacies at public hospitals can count toward your total spending for the PBS safety net.

Extra charges for PBS in Australia

  • Brand premiums: You might have to pay more than the co-payment if you choose a particular brand of medication when there's a cheaper option available.
  • Therapeutic group premiums: The government subsidizes all groups of drugs that have similar health and safety outcomes, up to the level of the lowest price drug. So, you'll have to pay the difference when choosing one that exceeds this price. Although, your doctor may request an exemption.
  • Special patient contributions: You might have to pay more when the Government and supplier cannot agree on a price.

Restrictions

The PBS limits the number of medications per prescription, as well as the number of repeats. When you've reached your limit, you'll need to be re-examined by your doctor.

Request health insurance quotes for non-PBS pharmaceuticals

How can you find out if the PBS covers the medicine you need?

To determine whether your prescription medication falls under the current PBS list, you need to visit the Pharmaceutical Benefits Scheme website, select the ‘Browse the PBS' tab and choose the A-Z medicine listing or you can view by brand.

Does private health insurance contribute to your PBS cost?

Generally, no if a medication is listed on the PBS, private health insurers are not allowed to pay a benefit towards the cost of those drugs. However, health insurance for overseas visitors might include pharmacy benefits on some of their Extras policies for those not eligible for Medicare or from a country without an RHCA.

Health insurance for non-PBS pharmaceuticals

If you have a private prescription, meaning the medicine is not listed under the PBS, you’ll generally have to pay full price. These private prescriptions will not count toward your safety net threshold.

However, should you have private health insurance, you might be able to claim a benefit for medications not listed under the Pharmaceutical Benefits Scheme (non-PBS). You’ll generally need a health insurance policy that includes Extras cover, listing non-PBS as one of the general treatments a benefit will be paid to.

Each private health insurance company is different, so it's vital that you speak with your insurer about how they can potentially help you save money on your non-PBS medications.

Take note: Private health funds generally won’t pay a benefit for medicines you can get without a prescription, including herbal supplements and vitamins. To claim a health insurance benefit, prescriptions must be prescribed by a medical practitioner; this includes contraceptives and vaccinations.

How much does health insurance cover for non-PBS medicines?

The payment you can expect to receive from your health insurer for non-PBS listed medications depends on your Extras policy level of cover, as well as your annual limit, and the minimum cost your medication must exceed, as well as the maximum amount of pharmaceutical benefits you can claim. Make sure you read the Standard Information Statement (SIS) of your policy.

How to claim pharmaceuticals from your health fund

There are many ways you can claim a non-PBS benefit from your health fund, including:

  • Swiping your private health insurance card on the spot at your pharmacists.
  • Claiming online via the member's section of the insurer's website or using their App.
  • Posting the claim forms, including the attached receipts.
  • Delivering it in person by visiting their offices.

Your claim generally needs to include the script number, the description of each medication and the date it was dispensed, as well as your personal information.

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