In Australia healthcare costs are paid for in three ways; by the Australian government through Medicare, by an individual’s private health insurance which is often called private health cover or simply health cover, or by the patient.
Medicare covers Australian citizens and permanent residents for a specified range and amount of medical and hospital services. Medicare provides benefits based on a government set schedule of fees listed in the Medicare Benefits Schedule, this is known as the MBS fee. MBS fees are not the fees doctors charge, they are set by the government to manage the benefits paid by Medicare. Doctors’ fees are not regulated, like all other businesses they can set their own prices. Many doctors refer to the AMA List of Medical Services and Fees to guide them in setting their fees.
For services provided by doctors outside of hospitals Medicare will reimburse 85% of the MBS fee. As a patient you pay 15% of the MBS fee plus any amount charged by the doctor over the MBS fee up to the maximum patient outlay for a professional service. The maximum patient outlay for a professional service is determined by Medicare and is reviewed annually. Private health insurers are not allowed to provide cover for doctors’ fees for out-of-hospital services.
When you go to hospital you can choose to be a public or a private patient. If you choose to be a public patient Medicare will cover the costs of your treatment in a public hospital at no charge, but you cannot choose the doctor who will treat you, you will be accommodated in a public ward, and may have to wait for the treatment you need.
If you go to hospital as a private patient Medicare will cover 75% of the MBS fee for the medical costs of your treatment. Private health insurance offers you a choice of health cover options that can help you pay the costs of your treatment and accommodation in hospital as a private patient. You can choose your doctor and whether you go to a public or private hospital that they attend. You may also have more choice about when you are admitted to hospital. Your choice of private health cover will determine how much choice and how much of your healthcare costs will be covered.
Both Medicare and private health insurers only cover treatments which have been recognised by Medicare. Therefore, some medical treatment may not be covered, for example experimental procedures and treatment chosen for cosmetic purpose.
Medicare does not cover a wide range of non-hospital extras or ancillary medical services. Private health insurance can cover services provided by dentists, optometrists, physiotherapists, psychologists, other specialist types of therapy, home nursing, and medical aids and appliances. Medicare covers part of the cost of many prescription pharmaceuticals under the Pharmaceutical Benefit Scheme (the PBS) and extras cover is available for prescription pharmaceuticals not covered under the PBS.
Cover for ambulance services can also be arranged. It may be part of either hospital cover or extras cover.