Medicare (Australia)

Medicare card

Services Australia issues each patient enrolled with the scheme a unique Medicare card and number which is required for a benefit to be made. More than one person can be listed on a given card and an individual can be listed on more than one card. The Medicare card or a digital alternative is used to make a claim at the time of paying for a service in Australia, or used to prove eligibility for medically necessary care in other countries that hold a reciprocal agreement with Australia. Medicare cards can also be used as part of identity verification processes with government agencies and financial institutions.

The card or the Medicare number is required to be provided to enable the cardholder to receive a rebate of medical expenses under Australia's Medicare system, as well as subsidised medications under the Pharmaceutical Benefits Scheme (PBS). The card is usually green in colour, although interim cards are light blue and cards for Reciprocal Health Care Agreement visitors are light yellow. The cards are issued by a government agency called Services Australia.

All permanent residents of Australia are entitled to a Medicare card, except for those who are deemed to be not residing in Australia. Citizenship is not necessary to be eligible for a Medicare card. The card lists an individual as well as any members of their family they choose to add who are also permanent residents and meet the Medicare definition of dependent. The card must be produced or the Medicare number provided if the Medicare rebate is paid directly to the doctor under the bulk billing system. The doctor can retain the Medicare number for use when the patient returns for another consultation. It is also necessary to provide a Medicare number (although not necessarily show the card) to gain access to the public hospital system to be treated at no cost as a public patient. For non-elective treatment (e.g. emergency), public hospitals will admit patients without a number or card and resolve Medicare eligibility issues after treatment.

The use of the card is relevant only to consultations with medical practitioners who have been issued with a Medicare provider number. Such access has been made subject to increasing requirements since the mid-1990s. The Medicare card is used for health care purposes only and cannot be used to track in a database a number of activities. It contains a name and number, and no visible photograph. Individuals are not legally required to have a Medicare card, to carry it with them, or to produce it on request.

Medicare cards are issued by Services Australia (until late 2005 known as the Health Insurance Commission or HIC) to individuals and their families. A maximum of five names can be included on a card. Families with more than five members will have additional names listed on additional cards, while retaining the same card number. Children are listed on their parent's card – a family may be all on one card, or a child may be listed on one parent's card, or both parents' cards, or even in some cases, alone on their own card if their name exceeds a specific number of letters. Children who are wards of the state will be listed on a card with the Department of Children's Services as cardholder. Medicare cards may be used to show a relationship when parents have different surnames to their children.

Individual Medicare cards are generally only issued to people over 15. This is a Medicare Australia policy (not legislation) and there are exceptions for people at boarding schools or away from home. Significantly, this policy may detract from the right of a mature minor to gain confidential medical care. Using their family's Medicare card (and presenting the card) could potentially notify their parents of the consultation, but only if the parents request information about their child's medical claims and for a person to request information about medical claims for people 14 years and over they must have the permission of that person they are requesting the information for.

Several unsuccessful proposals have been made to expand the scope of use of the Medicare card, such as the Australia Card proposal. In 2005, plans to expand the functions of the Medicare card were announced by then Howard government Human Services Minister Joe Hockey. The new card, to be called the Access Card, was intended to replace both the Medicare and up to 17 other similar cards (such as Centrelink benefit and concession cards), and to commence operation in 2008. However, the scheme was criticised by some sectors of the public and relevant interest groups as a step in the same direction of an Australia Card. The Howard government was unable to implement the scheme before the government's electoral defeat in 2007. The incoming Labor government announced on 7 December 2007 that the Access Card scheme would be abandoned. The same aims were later achieved with myGov from 2013.

In 2024, Services Australia produced Medicare cards featuring a commemorative 40-years of Medicare design to celebrate the anniversary of the program. Cards produced from 1 February through 31 December 2024, and cards accessed via the myGov or Medicare Express Plus app, featured a modernised design including the Services Australia logo and a 40-year anniversary wordmark.

Payments for health services

The Department of Health, Disability and Ageing sets a schedule of fees for services that Medicare will contribute to the costs of, called the Medicare Benefits Schedule or MBS. The minister for health and aged care determines the items on the MBS, based on the recommendation of the Medicare Services Advisory Committee. The MBS lists what the government considers a standard cost of that service (the schedule fee) and a percentage of that standard fee that Medicare will cover. The dollar value of the percentage of the schedule fee that Medicare will pay is called the Medicare benefit. For example:

The percentage of the schedule fee will be either 100%, 85%, or 75% depending on the circumstances of the "episode of care":

• 100% – for general practice services provided by general practitioners, or a practice nurse on behalf of a GP for Aboriginal or Torres Strait Islander patients.
• 85% – for specialist services, such as specialist appointments, pathology tests, and medical imaging.
• 75% – for services provided to a patient admitted in a recognised hospital, or a hospital-substitution services covered by private health insurance.

Bulk billing and gap payments

Service providers can choose how much to charge patients for services, including above or below how much Medicare will pay, with patients responsible for the difference. A 2012 study of the OECD found that Australia was the only country out of the 29 surveyed that gave service providers the right to charge more or less than the rebate amount.

When a provider chooses to only charge the patient as much as the Medicare rebate for an eligible service, and directly charges Medicare instead of the patient, this is called a "bulk billed" service. As Medicare covers the entire cost of the service, the individual patient does not have to pay anything. Most providers will only bulk bill concessional patients (people with concession cards, or aged 16 years or under), although some will bulk bill all eligible services for all eligible patients. The government pays an additional subsidy, called the Bulk Billing Incentive Payment, to providers when they bulk bill services for concessional patients.

If a provider chooses to charge above the Medicare rebate amount (whether that be above the schedule fee, or if Medicare does not pay 100% of the schedule fee), the individual patient is charged a "gap payment". For most services, the patient is responsible for paying the gap.

Many industry and professional groups, such as the Australian Medical Association (AMA), maintain their own list of recommended fees that their members can use to base their charges off. For example, the AMA's List of Medical Services and Fees recommends that general practitioners charge $102 for appointments lasting less than 20 minutes. The Medicare schedule fee for the corresponding item code is $41.40, with Medicare paying 100% of the schedule fee for GP services. A doctor that elects to charge the AMA fee will result in the patient being charged the difference of $60.60 as an out-of-pocket cost for the appointment. If a doctor charges less than the AMA recommended fee, the gap payment will decrease, and vice versa.

Fee indexation

Since the introduction of the MBS, the items listed have been subject to annual indexation aimed at keeping the Medicare benefit in-line with the costs of delivering care. At the inception of the Medicare system, the MBS schedule fees were the same as the AMA List of Fees. Since then, the difference between MBS schedule fees and actual service fees, particularly AMA fees, has grown significantly with increasing costs to patients.

In 2012, the Gillard Government introduced a two-year freeze on indexation as a temporary budget measure. This freeze was however repeatedly extended by the Turnbull and Morrison governments until July 2020. It is estimated that the prevented indexations saved the scheme a total of $3.9 billion. While the rate of bulk billed services remained steady during this period, the gap payment for providers already charging above the MBS amount increased. On 25 March 2018, the Labor Party announced that, if elected, it would remove all remaining indexation freezes, noting how the Morrison government's continued indexation freezes were leaving "families paying higher out-of-pocket costs to visit the doctor."

In the 2017–18 federal budget, the Turnbull government began to re-fund indexation after reaching agreements with the AMA and Royal Australian College of General Practitioners for their continued support of government projects such as the My Health Record system. Indexation resumed by providing $1 billion to index GP items from July 2017, specialist consultation items from July 2018, specialist procedures and allied health from July 2019, and diagnostic imaging from July 2020.

The 2024 indexation rate is 3.5% and is applied to most general practitioner, allied health and medical imaging services from 1 July 2024.

The AMA continues to petitions yearly for increases to MBS payments for services provided by its members, taking the stance that the MBS payments are decreasing in real terms due to annual inflation and that MBS indexation has not kept up. Their annual "Gaps Poster" calculates that despite average Consumer Price Index growth of around 3% each year, the MBS has only increased between 1.2% and 2.5% for most items between 1995 and 2012 (with no increase to medical imaging or pathology services).

Private hospital and allied health services

All patients that are eligible for Medicare are also eligible for state and territory public hospital services, which are typically free for most patients and funded under an agreement between the federal government and state and territory governments called the National Health Reform Agreement.

Patients in public hospitals that elect to be treated as private patients and patients in private hospitals will have some costs charged by doctors covered at the admitted patient rate (currently 75% of the schedule fee). Hospital costs not listed on the MBS, or where the cost is greater than the Medicare benefit, can be paid by private health insurance or by the patient. For MBS listed services provided to hospital inpatients, where the patient also holds private health insurance for that service, the private health insurer must contribute at least the remaining 25% of the schedule free. If a doctor chooses to charge more than the schedule fee, the private health insurer may contribute towards the gap depending on the insurance policy.

Some allied health rebates are limited to patients with a chronic disease where the GP has initiated a General Practitioner Management Plan, Team Care Arrangements, a Mental Health Case Conference, or is related to a specific disease or diagnosis. Referrals made for conditions covered by one of these may attract Medicare benefits where the service would otherwise not be eligible. These include services such as physiotherapy, podiatry and audiology. Optometry services can be provided without referral, while dentistry is not covered at all. Where the service is not covered by Medicare, private health insurance policies may provide an "extras" or ancillary benefit (typically up to an annual cap) towards these costs.

For patients receiving mental health care, Medicare provides up to 10 fully covered individual and group counselling sessions per year as part of the Better Access Scheme. To access these, a general practitioner, in collaboration with the patient, needs to issue a "mental health care plan" outlining the diagnosed mental health condition, treatment and support options, and goals of care. The Better Access Scheme also covers the cost of other mental health supports, including care from related professions such as occupational therapists, social workers, general practitioners and psychiatrists.

Medicare Safety Net

The first Medicare Safety Net, setting a maximum amount per year someone could pay for MBS-listed out-of-hospital services, was added in 1991. (It is now known as the Original Medicare Safety Net). The Extended Medicare Safety Net was added in 2004, providing similar assistance for heavy users of scheduled medical services.

To provide additional relief to those who incur higher than usual medical costs, Medicare safety nets have been set up. These provide singles and families with an additional rebate when an annual threshold is reached for out-of-hospital Medicare services. A basic safety net exists for all Australians, with an extended safety net for some families.

The thresholds for both safety nets are indexed on 1 January each year to the Consumer Price Index.

General safety net

Under the original Medicare safety net, once an annual threshold in gap costs has been reached, the Medicare rebate for out-of-hospital services is increased to 100% of the schedule fee (up from 85%). Gap costs refer to the difference between the standard Medicare rebate (85% of the schedule fee) and the actual fee paid, but limited to 100% of the schedule fee. The threshold applies for all Medicare cardholders and is $594.40 for 2026.

Extended safety net

The extended Medicare safety net was first introduced in March 2004. Once an annual threshold in out-of-pocket costs for out-of-hospital Medicare services is reached, the Medicare rebate will increase to 80% of any future out-of-pocket costs (now subject to the extended safety net fee cap) for out-of-hospital Medicare services for the remainder of the calendar year. Out-of-pocket costs are the difference between the fee actually paid to the practitioner (subject to the fee cap) and the standard Medicare rebate.

When introduced, the general threshold for singles and families was $700, or $300 for singles and families that hold a concession card and families that received Family Tax Benefit Part A. On 1 January 2006, the thresholds were increased to $1,000 and $500 respectively. From then the extended safety net was indexed by the Consumer Price Index on 1 January each year.

Since 1 January 2010, some medical fees have been subject to a safety net fee cap, so that the out-of-pocket costs used in determining whether the threshold has been reached are limited to that cap. The extended safety net fee cap also applies for any rebate that is paid once the EMSN threshold is reached. The items subject to a cap has expanded since 2010, the latest being in November 2012.

Funding of the scheme

Medicare levy

Medicare is presently nominally funded by an income tax surcharge, known as the Medicare levy, which is currently 2% of a resident taxpayer's taxable income. However, revenue raised by the levy falls far short of funding the entirety of Medicare expenditure, and any shortfall is paid out of general government expenditure.

The 2013 budget increased the Medicare levy from 1.5% to 2% from 1 July 2014, ostensibly to fund the National Disability Insurance Scheme. The 2017 budget proposed to increase the Medicare levy from 2% to 2.5%, from 1 July 2018, but this proposal was scrapped on 25 April 2018.

When the levy is payable, it is calculated on an individual's entire taxable income, and not just the amount above the low-income threshold.

Private Health Insurance Levy and Lifetime Health Cover (LHC)

In 1997, the Howard government implemented a higher level of Medicare levy for high income earners where they did not have a private health insurance policy. The purpose being to relieve strain on Medicare and the public health system by encouraging those that could afford it to receive care in the private system.

From the start of 1999, a 30 per cent rebate on the cost of private health insurance became available to further encourage people to take out private health insurance.

From 2000, the Lifetime Health Cover (LHC) initiative came into effect to encourage people to take out private health insurance with hospital coverage earlier in life. Individuals 31-year or older, and not exempted, are charged an additional 2% on any private hospital insurance policy they purchase for each year after their 30th birthday that they do not have coverage. They are required to pay this additional loading, up to a maximum of 70%, for 10 years, and the federal government rebate does not include the cost of LHC. After 10-years of continuous coverage, the loading is then removed.

Low income exemptions

Low income earners are exempt from the Medicare levy, with different exemption thresholds applying to singles, families, seniors and pensioners, with a phasing-in range. Since 2015–16, the exemptions have applied to taxable incomes below $21,335, or $33,738 for seniors and pensioners. The phasing-in range is for taxable incomes between $21,335 and $26,668, or $33,738 and $42,172 for seniors and pensioners.

Eligibility

The following groups of people have access to fully-covered health care in public hospitals via the Medicare system:

• Australian citizens
• New Zealand citizens who have lived in Australia for six months or more over the previous year
• Permanent residents
• People who have applied for permanent residence
• Temporary residents covered by a ministerial order
• Citizens or permanent residents of:
  • Norfolk Island
  • Cocos (Keeling) Islands
  • Christmas Island

Reciprocal agreements

International visitors from 11 countries have subsidised access to medically necessary treatment under reciprocal agreements. Reciprocal Health Care Agreements (RHCA) are in place with the United Kingdom, Sweden, the Netherlands, Belgium, Finland, Norway, Slovenia, Malta, Italy, Republic of Ireland, and New Zealand, which entitles visitors from these countries limited access to public health care in Australia (often only for emergencies and critical care), and entitles eligible Australians to reciprocal rights while in one of these countries.

Exclusions

Asylum seekers in Australia who have applied for a protection visa and whose bridging visa had expired have no access to services like Medicare, and no Centrelink payments or other social services, and are not allowed to work. It was estimated in July 2022 that there were around 2000 people in this situation.

All prison systems in Australia prevent incarcerated people, including children in juvenile detention, from accessing Medicare while imprisoned. Incarcerated patients are instead entitled to health services, which are funded and/or provided by the state or territory corrections or health department. The level of care available, however, is far below the level given to people with Medicare, and many health services are inaccessible to incarcerated patients as they are considered too expensive without Medicare funding. Prisons restrict access to Medicare as they believe that by doing so they are complying with the Health Insurance Act 1973, the legislation that governs Medicare billing. However, in 2024 it was argued that due to the wording of the legislation and existing precedent from the High Court of Australia, prisoners were legally entitled to Medicare. In 2025, legal and health professionals arranged for mental health treatments to be provided to a prisoner via Telehealth, which were then successfully billed to Medicare. As of 2026, a Federal Court challenge was being made arguing that Medicare access in prisons is legal.