Health insurance vs Medicare

The article on the ADF Family Health Program, contributed by Defence Health, explains how the program helps Defence families with the cost of health care. Here we explain what health care costs are covered by Medicare and why you may benefit from taking out private health insurance.

What is Medicare?

Medicare is Australia’s universal health care system that gives all permanent Australian residents access to a wide range of health services at a low, or no, cost. Medicare covers:

• 100% of the costs when you are admitted to a public hospital as a public patient
• 100% of the cost of visiting a bulk-billing general practitioner (GP)
• 85% of the Medicare Benefit Schedule (MBS) fee for an out-of-hospital specialist
• Subsidised prescription medicine listed on the Pharmaceutical Benefits Scheme (PBS)
• Some, or all of the MBS fee for diagnostic imaging services such as x-ray; MRI; ultrasound; and cancer screening; and pathology tests and eye tests with an optometrist (excluding glasses or contact lenses)
• Some, or all of the MBS fee for mental health care.

Providers who bulk bill accept payment in full from Medicare and the patient has nothing to pay. Providers who do not bulk bill will usually require a co-payment from the patient (the difference between the Medicare rebate and the fee charged). If a provider charges significantly more than the MBS fee for the service, the patient will have a much higher co-payment (or out-of-pocket expense).

Waiting lists apply for treatment in the public system. Patients are treated in public hospitals according to urgency. Sometimes they may have to wait many months for treatment when more urgent cases join the list.

How is Medicare funded?

Medicare is funded through the Medicare levy. This is levied on most working Australians at a rate of 2% of their taxable income. Medicare is usually deducted by an employer along with income tax.

Full-time serving ADF members do not pay the Medicare levy as most of their medical costs are covered by Defence. Defence also covers many additional services usually covered by private health insurance.

For more information on Medicare, go to the Medicare section on the Department of Human Services website.

Do you need private health insurance?

Private hospital insurance gives you access to private specialist treatment, in a private hospital. Rather than joining the public hospital elective surgery waiting list, treatment can be received almost immediately.

Private general treatment insurance (or extras cover) is for a range of services not covered by Medicare. For example, services like dental treatment, optical (glasses and contacts), physiotherapy, speech and occupational therapy, chiro, osteo and ambulance cover.

Costs for private hospital and extras cover can vary considerably depending on the health fund and the level of cover.

Often someone who is younger and/or fit and healthy will opt for a basic level of cover and those getting older, or with families may opt for more comprehensive cover. Gold, silver, bronze and basic tiers of cover offered by health funds must include minimum standards of clinical treatment.

For more information on private health insurance go to PrivateHealth.gov.au.

Even with private health insurance, you should talk to your doctor about charges. There are limits on what insurers are permitted to cover and the doctor must explain any ‘gap’ payable by you, before you undergo treatment.

ADF Family Health Program

The ADF Family Health Program supports ADF families by covering some of the out-of-pocket expenses family members may incur where Medicare or private health insurance doesn’t cover the full cost of medical service provided.