Medicare is Australia’s national health scheme which guarantees all citizens, permanent residents and New Zealanders access to a wide range of health services at little or no cost. It guarantees public patients in public hospitals free treatment. It is funded through a mix of general revenue and the Medicare levy. The Medicare levy is currently set at 1.5% of taxable income with an additional surcharge of 1% for high-income earners without private health insurance cover. This is covered below in more detail under ‘private medical insurance’.
The benefits paid to patients under Medicare are generally 85% of the fee listed for the service in the Medicare Benefits Schedule (75% of the schedule fee for private patients in hospital). When providers are willing to accept the Medicare benefit as full payment for a service, they bill the government directly (bulk-billing) and the patient is not charged.
There is term used in Australia called ‘gap’ when referring to medical bills. If the treating facility does not fully bulk-bill the government the patient is asked to pay ‘the gap’ of the price of the treatment.
How do you get access to Medicare?
Firstly you and your family need a medicare card. You need to:
- live in Australia (you cannot apply before you move to Australia (we looked into this)).
- be an Australian PR or citizen or New Zealand citizen.
- if you have applied for PR (and you are not a Kiwi) you can still get a Medicare card if:
- you are on a visa allowing you to work, or
- prove your parent, spouse or child is an Australian citizen, permanent resident, or a New Zealand citizen living in Australia.
When you go to a service centre go early before they open and wait 15-20 mins. You will be first in line and this is far better than waiting 1.5 hours plus as these places get extremely busy.
At the service centre you will need to provide:
- completed Medicare enrolment form
- bank account details
- passport or travel document for all the people listed on your application
- 2 documents confirming you’re living in Australia
- 1 Australian document and 1 document proving you’re no longer living in New Zealand (refer here to see which documents qualify).
Once you have gone and visited the service centre, you are issued a medicare card on the spot. From there you can access their online system which allows claiming on invoices up to a certain amount. You can do a lot online rather than visiting a service centre.
Private medical insurance – why and how
I won’t tell you what you should do but here is my take on this touchy subject (even though rates are increasing for private health insurance).
- Private cover is not only a good idea but it is a great idea for high income earners to take out as it actually costs you less to have a certain level of private health insurance rather than just pay the extra compulsory medicare levy if you do not have private health cover. Yes, you save money by having private health cover (up to a certain point). There are two financial incentives the government uses to push people into private health insurance. The first is the Medicare Levy Surcharge (MLS). The MLS is an additional tax paid by high income earners (singles earning over $90,000 and couples over $180,000) who don’t have private hospital cover. It begins at $900 a year for singles, and increases the more you earn. Since there are budget hospital policies that cost less than this, if you’re on a high income if you can reduce your tax bill by simply buying insurance. The second is,
- Lifetime Health Cover (LHC). You can avoid this nasty ‘tax’ easily (if you have never lived in Australia before) and I will tell you how below. LHC loading affects you if you take out hospital cover after your 31st birthday, or if you have any long gaps between cover. If you don’t take out hospital cover before you turn 31 (while living in Australia), and you do eventually take it out, you’ll pay an extra 2% on your premiums for every year you waited. If you never get private health insurance, the LHC loading will never affect you.
Avoiding the LHC – There is one main criteria which has been mentioned already. If you are 31 years or older and you have never lived in Australia before then once you have chosen a private health insurer provider you provide them with a couple of bits of information. The primary one being your ‘international movement records’. This is free to get once you post off the application (or email it them which is what I did). This proves you have been not living in Australia after your 31st birthday effectively.
Get the above document off in the post before you move to Australia as it takes a few months to receive it back via email. Its nice to have so you are organised when you are in Australia.
Best website for private health insurance:
There are many websites for private health insurance and there are many random companies which provide different levels of cover. All I can provide is the website we used to compare and choose a private health provider (and this was recommended from an insurance broker randomly). The website is choosewell.com.au