The Young Australian's Guide to Insurance & Medicare

Medicare is Australia's universal health insurance scheme, funded by the Medicare levy. It covers a broad range of medical services — but not everything, and understanding what's included (and what isn't) saves you from unexpected bills.

Medicare covers GP visits, specialist consultations, most diagnostic tests (blood tests, X-rays, MRIs in certain circumstances), and public hospital treatment as a public patient. The Medicare Benefits Schedule (MBS) sets the scheduled fee for each service — Medicare pays either 100% of the schedule fee (for GP services) or 85% (for specialist services). If a doctor charges above the schedule fee, you pay the difference — called the gap.

Bulk billing means the doctor accepts the Medicare rebate as full payment and bills the government directly. You pay nothing out of pocket. Bulk billing rates vary significantly by location — major city practices bulk bill less frequently than regional ones, and the rate of bulk billing has been declining as the Medicare rebate hasn't kept pace with practice costs.

• What Medicare covers: GP visits, specialist referrals, pathology, diagnostic imaging, public hospital as a public patient, some allied health under specific plans.
• What Medicare does NOT cover: dental (except limited child dental benefit), most physiotherapy and psychology as standalone services, ambulance (except QLD and TAS which have state-funded schemes), optical, most cosmetic procedures.
• The Medicare Safety Net kicks in once your out-of-pocket costs exceed a threshold in a calendar year ($770.30 for concession card holders, $2,249.80 for general patients in 2024–25). After that, Medicare covers a higher percentage of costs for the rest of the year.

Private health insurance in Australia comes in two forms: hospital cover and extras cover. They're sold separately and serve very different purposes.

Hospital cover pays for treatment as a private patient in a public or private hospital. The key benefit is choice — you can choose your specialist, have a private room (subject to availability), and avoid public hospital waiting lists for elective procedures. Hospital policies are divided into four government-regulated tiers:

• Gold — the most comprehensive tier, must cover everything including pregnancy and weight loss surgery
• Silver — covers most major services, with some exclusions depending on the policy
• Bronze — covers a minimum set of services; a common entry point for people primarily avoiding the MLS
• Basic — the minimum level, covers ambulance and very little else

Extras cover (also called ancillary cover) pays a rebate toward services Medicare doesn't cover: dental, optical, physio, chiro, remedial massage. The value depends entirely on how much you use those services. For most healthy 20-somethings who don't see a dentist or physio regularly, extras cover often costs more in premiums than it returns in benefits.