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National Health Services for Expats in Australia

Submitted: July 2013

The Australian national health policy is based on a co-payment structure, progressivity and social citizenship. Consequently, taxpayer support towards your healthcare costs is conditional on your residence and/or citizenship, and it gradually decreases as your income increases. If you are a high-income individual, the Australian healthcare system expects you to contribute more with your own funds. Healthcare in Australia is mostly funded by the tax system and the Medicare Levy, which is paid along with Australian income tax.

Although Australia has public hospitals, most Australian healthcare providers are private. Therefore, the private sector plays a critical role in the healthcare system.

Medicare is Australia’s main public healthcare programme. It is a reimbursement mechanism whereby users are refunded a large share of their qualifying healthcare expenses, even if they are incurred from an Australian private healthcare provider.

Additional healthcare programmes are funded by the Australian federal government, but in cooperation with the authorities at state/territory level. These programmes include, but are not limited to:

  • Population health
  • Mental health
  • Basic dental care
  • Rural or indigenous healthcare
  • Healthcare for war veterans

A private medical insurance policy might supplement taxpayer-funded healthcare. See Health Insurance for Expats in Australia It is largely encouraged by the Australian government for middle class and high-income earners, notably through the private health insurance rebate and the Medicare Levy Surcharge (MLS).

Expatriates should always check their residence status and how it interacts with the Australian national health system.

Medicare benefits

If you are entitled to Medicare in Australia (see below), you receive a Medicare card when you enrol for Medicare.
Medicare benefits are the amount above which the Medicare programme no longer pays for your expenses for any given treatment. See Doctors and Hospitals for Expats in Australia The amounts are publicly available in a document called “Monthly Benefits Schedule” (MBS). It is reviewed frequently by the Australian Department of Health and Ageing. The July 2013 MBS is available here.

In a public hospital, services are normally covered entirely by Medicare benefits. Therefore, public hospitals are actually free for individuals entitled to Medicare. Outside the public hospital, it is very important to estimate your actual costs in advance. See Doctors and Hospitals for Expats in Australia

Some doctors will “bulk bill” and charge only the MBS fee. This means that you only have to show your Medicare card, so the doctor sends the invoice directly to Medicare. Therefore, you don’t have to disburse any money at all.
However, the majority of doctors charge more than the MBS fee. In this case, you may have to pay in full and apply for reimbursement from your Medicare office by showing your invoice.

Excluded services

Medicare does not pay benefits for:

  • Certain private patient hospital costs (e.g. operating theatre fees, accommodation or medications)
  • Overseas medical expenses
  • Medical or Hospital services which are not clinically necessary
  • Cosmetic surgery
  • Most dental care (exceptions apply for some surgical procedures)
  • Chiropractic treatment
  • Home nursing
  • Podiatry
  • Psychology services
  • Physiotherapy
  • Eye treatment (other than sight tests)
  • Work-related care
  • Speech-language therapy
  • Prostheses
  • Acupuncture
  • Ambulances See Health Emergencies for Expats in Australia
  • Glasses
  • Hearing aids, and
  • Contact lenses.

Medicare entitlement

You are entitled to Medicare if you are:

  • An Australian citizen
  • An Australian permanent resident, or
  • A visitor or a temporary visa holder, if you are covered by a reciprocal agreement between Australia and the country you are a resident/national of. Your Medicare entitlement would be only partial, and would cover “medically essential” treatment.

Reciprocal agreements countries include: Belgium, Finland, Ireland, Italy, Malta, Netherlands, New Zealand, Norway, Slovenia, UK (including Channel Islands and Isle of Man). If you wish to claim your rights under a reciprocal agreement, you must follow the correct procedure steps and submit your Medicare enrolment form to the Australian authorities. Also, please be aware that you would be covered for emergency treatment but not for ambulances, as these are not covered by Medicare anyway. See Health Emergencies for Expats in Australia
You can also get assistance from the Australian government if:

  • You are an asylum seeker and your application is being processed, or
  • You are an illegal immigrant and you are held in a detention centre

If you are not entitled to Medicare, you may apply for an exemption from the Medicare Levy and the MLS.  However, your application may be rejected if:

  • You are an Australian citizen having lived abroad for less than five years
  • You were resident in a country with which Australia has a reciprocal agreement prior to entering Australia, or
  • You hold a permanent resident visa or have applied for it.

Medicare Levy Surcharge

To encourage high-income individuals to rely more on private healthcare, the ATO charges a Medicare Levy Surcharge (MLS). The MLS applies only to high-income individuals without a qualifying private healthcare cover.
For MLS purposes, your taxable income includes notably:

  • Your taxable income for income tax purposes
  • Your reportable fringe benefits and superannuation or pension contributions, as reported on your payslip, and
  • Your net investment losses

The MLS rates from 1 July 2013 to 30 June 2014 are as follows:


Income for single individuals (AUD)

Income for families/couples (AUD)

Rate (%)

Below 88,000

Below 176,000

0

88,001 to 102,000

176,001 to 204,000

1

102,001 to 136,000

204,001 to 272,000

1.2

136,001 and over

272,001 and over

1.5

Income thresholds are increased by AUD1,500 per dependent child above the first one.
For MLS purposes, a qualifying private health insurance must:

  • Not provide for an excess greater than AUD500 (AUD1,000 for couples or families)
  • Include all your dependants
  • Include hospital cover See Health Insurance for Expats in Australia, and
  • Be with a registered insurer. Consequently, this excludes foreign insurance policies.

You can also avoid the MLS if you are a resident abroad (including Norfolk Island), or if you are not entitled to Medicare. In the latter case, you must apply for an exemption certificate from a Medicare office.

Private health insurance rebate

The private health insurance rebate is money that you can claim from the Government when you take out a health insurance policy and are eligible for Medicare. From 1 July 2013, the rebate does not apply to LHC loadings. See Health Insurance for Expats in Australia

You can be paid:

  • By being charged a reduced insurance premium
  • By applying for a tax credit through your tax return with the ATO, or
  • Via a Medicare office.

The rebate rates from 1 July 2013 to 30 June 2014 are as follows:


Income for single individuals (AUD)

Income for families/couples (AUD)

Below 65

65 to 69

70 and above

Below 88,000

Below 176,000

30%

35%

40%

88,001 to 102,000

176,001 to 204,000

20%

25%

30%

102,001 to 136,000

204,001 to 272,000

10%

15%

20%

136,001 and over

272,001 and over

0%

0%

0%

Pharmaceutical Benefits Scheme (PBS)

Under Medicare’s PBS, you pay only a subsidised prescription charge for the medicines prescribed by your doctor. Medicare foots the remaining part of the bill.

If you have a specific question regarding PBS, you may find your answer on the PBS website.

Additional health-related benefits

Low-income individuals may apply for concession cards. These cards may substantially reduce certain co-payments.
Australia also has introduced “safety nets” for Medicare purposes. These are designed to help you if you happen to have high qualifying medical costs for any reason (X-rays, blood tests, specialist consultations, etc.). Under safety net rules, additional taxpayer support kicks in when your qualifying co-payments exceed a threshold in any given year. For more information on safety nets, click here.

Cost/benefit analysis for expats

Foreign expats living in Australia may be at a disadvantage if they are ineligible to Medicare. However, they are likely to benefit from special concessions for income tax, Medicare Levy and MLS purposes (see exemptions above).

 

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