Australian healthcare is the public insurance scheme, the public hospitals, and the private care that sit alongside them. This page explains how the Australian healthcare system is funded and run, what Medicare pays, how public and private care differ, and what shapes access to healthcare in Australia. It is for people preparing to enter medicine. These are the rules you meet on placement, and the background to interview questions about the system you are joining.
How the Australian healthcare system is organised
The Australian healthcare system is shared. The Australian Government funds Medicare and subsidised medicines, regulates private health insurance, and supports primary care. State and territory governments run the public hospitals. General practices, private hospitals, and insurers deliver a large share of day-to-day care. The department’s stated aim is choice, and care that is safe and of good quality, with Medicare and public hospitals providing care at low or no cost. Australians have some of the highest life expectancies in the world. Source: The Australian health system, Department of Health, Disability and Ageing.
In 2023–24, health spending was an estimated $270.5 billion. That was about $10,037 per person, and 10.1% of GDP. The same account splits the bill this way:
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| Who paid, 2023–24 Who paid, 2023–24 |
Share Share |
|---|---|
| Australian Government Australian Government |
39.3% 39.3% |
| State and territory governments State and territory governments |
30.3% 30.3% |
| Individuals, through out-of-pocket costs Individuals, through out-of-pocket costs |
16.3% 16.3% |
| Private health insurers Private health insurers |
7.8% 7.8% |
| Other non-government sources Other non-government sources |
6.4% 6.4% |
Source: The Australian health system, Department of Health, Disability and Ageing.
The path into the profession, including general practice, is a different question. It is covered in how to become a doctor in Australia.
Who funds care, and who delivers it
The Australian Government sets Medicare Benefits Schedule policy and Pharmaceutical Benefits Scheme policy. It supports and regulates private health insurance, monitors primary care, and works on the spread of the health workforce. It buys vaccines for the National Immunisation Program, regulates medicines and medical devices through the Therapeutic Goods Administration, and funds health and medical research. It also funds veterans’ care and community-controlled Aboriginal and Torres Strait Islander primary healthcare organisations. Source: The Australian health system, Department of Health, Disability and Ageing.
State and territory governments manage public hospitals. They fund community and mental health services, run public dental clinics, provide ambulance and patient transport, and license health premises. Local councils may provide environmental health, public health programs, and community-based care. Governments share the funding of public hospitals, prevention such as cancer screening, the registration and accreditation of health professionals, palliative care, mental health reform, and responses to national emergencies. Source: The Australian health system, Department of Health, Disability and Ageing.
Commonwealth payments for public hospitals and related community services go through the National Health Reform Agreement. The 2026–2031 addendum was signed on 27 February 2026 and began on 1 July 2026. The states and territories remain the system managers. They decide the mix of services in each hospital and plan public hospital performance. Source: About the National Health Reform Agreement, Department of Health, Disability and Ageing.
Primary care, referrals, and local networks
Primary care is often a person’s first contact with the system. It includes general practice and the community services around it, and it is where much prevention, diagnosis, and long-term care happens. Source: Rural and remote health, Australian Institute of Health and Welfare.
A Medicare benefit for many specialist and consultant physician services depends on a valid referral from another practitioner. The referral is written, signed, and dated, and the specialist needs it on or before the visit. Emergencies, and some referrals made during a hospital admission, follow separate rules. A GP referral is generally valid for 12 months from the first specialist visit. The GP can write a shorter period, a longer period, or an indefinite one. A referral from one specialist to another is generally valid for 3 months. Sources: Medicare Benefits Schedule note GN.6.16 and Referrals for specialist services, MBS Online factsheet, July 2026.
Thirty-one Primary Health Networks plan local primary care. They support general practice, after-hours services, and mental health, and they work on the handover when a patient leaves hospital and returns to a GP. Source: The Australian health system, Department of Health, Disability and Ageing.
Pressures already on the system
The department names an ageing population, more chronic disease, the cost of research and new technology, and health data that is hard to join up across services. It also names rising costs, new health threats, uneven access, and hospital waiting times. Source: The Australian health system, Department of Health, Disability and Ageing. Medicare sets the floor under fees. It does not, by itself, put a service in every town.
What Medicare pays for
Medicare is Australia’s universal health care scheme. It helps pay for medical services, hospital services, and tests, imaging, and scans. It covers the full cost of public hospital services. It covers part or all of the cost of other care, including a GP appointment, some psychology sessions, a community-nurse visit after hospital, and basic dental services for children. Source: The Australian health system, Department of Health, Disability and Ageing.
The Medicare Benefits Schedule is the list of services the Australian Government helps pay for. Each service has a schedule fee. Medicare pays 100% of that fee for a GP consultation and 85% for a specialist. A practitioner may charge more than the schedule fee, and the patient pays the difference. Source: Medicare costs, Department of Health, Disability and Ageing. Services Australia describes the same split: 100% of the schedule fee for GP consultations, and 85% for out-of-hospital services. Source: Medical costs, Services Australia.
For care as a private patient in a public or private hospital, Medicare pays 75% of the MBS fee for services on the schedule. Source: About private health insurance, Department of Health, Disability and Ageing. The department’s Medicare costs page says insurers pay at least 25% of the schedule fee for a private hospital patient, and that fees above the schedule fee remain the patient’s unless the policy contributes. Source: Medicare costs, Department of Health, Disability and Ageing.
Most taxpayers pay for Medicare through a Medicare levy of 2% of taxable income. People under a set income pay a lower rate, or none. General taxation covers the rest. Source: Medicare costs, Department of Health, Disability and Ageing.
Who can use it
The department lists Medicare as available to Australian citizens, New Zealand citizens, permanent residents in Australia, and people from countries with a reciprocal agreement. Visitors covered by a reciprocal agreement can also use PBS medicines. Source: The Australian health system, Department of Health, Disability and Ageing. Enrolment, and the limits of a reciprocal agreement, are set by Services Australia. Source: Medicare, Services Australia.
Bulk billing and the gap
Bulk billing means you do not pay the practitioner for that service. The practitioner bills Medicare and accepts the Medicare benefit as full payment. You can be bulk billed when you are enrolled in Medicare and the practitioner chooses to bulk bill. One visit can include several services, and not every service in the visit has to be bulk billed. Ask when you book. Source: Bulk billing, Services Australia.
From 1 November 2025, Medicare Benefits Schedule bulk billing incentives apply to all Medicare-eligible patients. Before that date they were limited to children under 16 and Commonwealth concession card holders. A practice can also join the Bulk Billing Practice Incentive Program. A participating practice bulk bills every eligible service for every Medicare-eligible patient. It then receives an extra quarterly payment of 12.5% of the MBS benefits for those services, split evenly between the GP and the practice. The practice registers with MyMedicare. The patient does not have to be registered with MyMedicare for the practice to take part. The program is voluntary, so a Medicare card does not guarantee a bulk-billed appointment. Sources: Bulk Billing Practice Incentive Program registration now open, Department of Health, Disability and Ageing and About bulk billing incentives in general practice, Department of Health, Disability and Ageing.
Stations that ask you to talk through bulk billing, gaps, or pressure on Medicare are practised in the MMI interview guide.
Medicines on the PBS
A Medicare card also opens the Pharmaceutical Benefits Scheme. For most listed medicines the patient pays a co-payment and the government pays the rest. Source: The Australian health system, Department of Health, Disability and Ageing.
From 1 January 2026 the maximum general co-payment is $25 for the rest of 2026, down from $31.60. It is indexed from 1 January 2027. A concession card holder pays a maximum of $7.70 until 1 January 2030. A brand premium can sit on top of the co-payment, and that premium does not count toward the PBS Safety Net. Source: PBS co-payments, Department of Health, Disability and Ageing.
The PBS schedule, as at 1 July 2026, sets the general safety-net threshold at $1,748.20. After a general patient reaches it, the co-payment falls to the concessional rate, up to $7.70. The concessional threshold is $277.20. After that, the concessional co-payment is nil. Delivery fees, after-hours fees, brand premiums, and some special patient contributions can still be charged. Source: Fees, patient contributions and safety net thresholds, Pharmaceutical Benefits Scheme.
Safety nets when the bills add up
Medicare safety nets apply to out-of-hospital services on the MBS. They do not apply to in-hospital care, or to care that is not on the schedule. Gap amounts are the difference between the Medicare benefit and the schedule fee. Out-of-pocket amounts are the difference between the benefit and the practitioner’s charge. Source: Medicare safety nets, Department of Health, Disability and Ageing.
For 2026, Services Australia sets these thresholds. They apply to the calendar year:
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| 2026 safety net 2026 safety net |
Threshold Threshold |
What counts What counts |
Higher benefit after the threshold Higher benefit after the threshold |
|---|---|---|---|
| Original Medicare Safety Net Original Medicare Safety Net |
$594.40 $594.40 |
Gap amounts Gap amounts |
100% of the schedule fee for later out-of-hospital services 100% of the schedule fee for later out-of-hospital services |
| Extended Medicare Safety Net, general Extended Medicare Safety Net, general |
$2,699.10 $2,699.10 |
Out-of-pocket amounts Out-of-pocket amounts |
80% of later out-of-pocket costs, or the service’s benefit cap if that is lower 80% of later out-of-pocket costs, or the service’s benefit cap if that is lower |
| Extended Medicare Safety Net, concession card or Family Tax Benefit Part A Extended Medicare Safety Net, concession card or Family Tax Benefit Part A |
$861.20 $861.20 |
Out-of-pocket amounts Out-of-pocket amounts |
80% of later out-of-pocket costs, or the benefit cap if that is lower 80% of later out-of-pocket costs, or the benefit cap if that is lower |
An individual is counted automatically. A family registers with Services Australia so that costs are added together. Only verified payments count. A payment is verified when the practitioner’s fee is paid in full before the Medicare claim. Source: Medicare Safety Nets thresholds, Services Australia.
From 1 January 2027 the department’s published thresholds are $617.50 for the original safety net, $2,804.30 for the general extended safety net, and $894.70 for the concession and Family Tax Benefit Part A extended safety net. Source: Medicare safety nets, Department of Health, Disability and Ageing.
These amounts are indexed. Use the Services Australia and PBS pages for the year you are reading in.
Public and private care
Public and private care run side by side. Medicare and public hospitals are there so people can use needed care at low or no cost. Private health insurance helps pay for treatment as a private patient, and for some everyday costs that sit outside Medicare. Source: The Australian health system, Department of Health, Disability and Ageing.
Australian medical graduates who work in both sectors train through the schools in the Australian medical schools guide.
Care as a public patient
A public hospital is approved by a state or territory government and funded by that government and the Australian Government. Anyone with a Medicare card can receive public hospital services free of charge as a public patient. Access follows clinical need, within a clinically appropriate time. That cover includes the emergency department, admitted care as a public patient, and non-admitted public hospital services. A public patient does not choose the doctor. Planned surgery can mean a waiting list. A co-payment can still apply to pharmaceuticals supplied as part of the hospital stay. Source: Public hospitals, Department of Health, Disability and Ageing.
A private patient in a public hospital can choose the doctor and pays for the care. Private health insurance may cover some of those costs. Sources: Public hospitals, Department of Health, Disability and Ageing and About hospital care in Australia, Department of Health, Disability and Ageing.
Treatment as a public patient in a public hospital outpatient clinic is free. A private referral to a doctor in that clinic can attract a Medicare benefit when the treatment is on the MBS. Being seen in outpatients is not the same as being admitted. Source: About private health insurance, Department of Health, Disability and Ageing.
Private operators own private hospitals. State and territory governments license them, and the Minister for Health and Aged Care declares a facility a hospital before it can receive private insurer benefits. Source: About hospital care in Australia, Department of Health, Disability and Ageing.
Private insurance, the levy surcharge, and what a policy cannot pay
Private health insurance is optional. You buy it from a registered insurer and keep paying the premium. Hospital cover helps with the cost of treatment as a private patient, in a public or private hospital, with a choice of doctor. General treatment cover, often called extras, helps with services such as dental, optical, and physiotherapy. Some people hold one type, some hold both. Holding a policy does not stop you choosing to be a public patient. Insurance may also shorten the wait for some planned hospital care. Source: About private health insurance, Department of Health, Disability and Ageing.
The department’s comparison is the practical one:
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| Service Service |
Public care Public care |
Private health insurance Private health insurance |
|---|---|---|
| In hospital In hospital |
As a public patient, the public system covers treatment. You do not choose the hospital or the doctor. As a public patient, the public system covers treatment. You do not choose the hospital or the doctor. |
As a private patient, the insurer covers some or all of hospital costs such as accommodation. Medicare covers some of the doctors’ costs, and the insurer covers some or all of the rest. You can choose the hospital, doctor, and specialist. As a private patient, the insurer covers some or all of hospital costs such as accommodation. Medicare covers some of the doctors’ costs, and the insurer covers some or all of the rest. You can choose the hospital, doctor, and specialist. |
| GP and specialist care outside hospital GP and specialist care outside hospital |
Medicare covers some or all of the fee. Medicare covers some or all of the fee. |
Not covered. By law, insurers cannot offer cover for most of these services. Not covered. By law, insurers cannot offer cover for most of these services. |
| Other care outside hospital Other care outside hospital |
Medicare covers some children’s dental care, optometrist eye checks, and some allied health, such as psychology in set circumstances. Medicare covers some children’s dental care, optometrist eye checks, and some allied health, such as psychology in set circumstances. |
An extras policy can cover some or all of the cost of many of these services. An extras policy can cover some or all of the cost of many of these services. |
| Prescription medicines Prescription medicines |
The Pharmaceutical Benefits Scheme. The Pharmaceutical Benefits Scheme. |
A policy can cover some medicines that are not on the PBS. A policy can cover some medicines that are not on the PBS. |
| Ambulance Ambulance |
Some state and territory governments provide cover. Some state and territory governments provide cover. |
A policy can cover ambulance when the state or territory does not. A policy can cover ambulance when the state or territory does not. |
Source: About private health insurance, Department of Health, Disability and Ageing.
Private health insurance is community rated. Everyone pays the same price for a given policy, an insurer cannot refuse you that policy, and you can renew it. If your income is under the rebate limit, the Australian Government rebate can lower the premium, or be claimed in the tax return. The department has announced that people in the same income tier will receive the same rebate rate, with the change planned for 1 April 2027. Source: About private health insurance, Department of Health, Disability and Ageing.
Lifetime Health Cover is separate from the rebate. Take out hospital cover before you turn 31 and you avoid a loading. Take it out for the first time after 31 and you may pay higher premiums for the next 10 years. The loading does not apply to extras cover. Source: About private health insurance, Department of Health, Disability and Ageing.
The Medicare levy surcharge sits on top of the 2% Medicare levy. It is 1% to 1.5% of income for surcharge purposes, and it applies when you do not hold appropriate private hospital cover and your income is over the threshold. For 2026–27 the surcharge starts above $105,000 for a single person and above $210,000 for a couple or family. The family threshold rises by $1,500 for each dependent child after the first. Source: Medicare Levy Surcharge, privatehealth.gov.au.
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| 2026–27 income for surcharge purposes 2026–27 income for surcharge purposes |
Single Single |
Family Family |
Surcharge Surcharge |
|---|---|---|---|
| Base Base |
$105,000 or under $105,000 or under |
$210,000 or under $210,000 or under |
None None |
| Tier 1 Tier 1 |
$105,001 to $123,000 $105,001 to $123,000 |
$210,001 to $246,000 $210,001 to $246,000 |
1% 1% |
| Tier 2 Tier 2 |
$123,001 to $164,000 $123,001 to $164,000 |
$246,001 to $328,000 $246,001 to $328,000 |
1.25% 1.25% |
| Tier 3 Tier 3 |
$164,001 and over $164,001 and over |
$328,001 and over $328,001 and over |
1.5% 1.5% |
Appropriate hospital cover, for this test, has an excess of no more than $750 for a single person and $1,500 for a couple or family. Extras cover without hospital cover does not remove the surcharge. Overseas visitors cover and overseas student health cover do not remove it either. Source: Medicare Levy Surcharge, privatehealth.gov.au.
Access to healthcare in Australia
Access to healthcare in Australia depends on whether a service is covered, whether a practitioner bulk bills, how far away the service is, and whether people can use it safely. Medicare is a national floor under fees. It does not put the same care within reach of every community.
Cost, distance, and GP use
About 7 million people, 27% of the population, live in rural and remote areas, outside the major cities. People in those areas have higher rates of hospitalisation, death, and injury, and poorer access to primary care, than people in major cities. Distance, fewer specialist services, and the cost of travel, accommodation, and lost income lead some people to delay preventive care and to rely on hospitals instead. Source: Rural and remote health, Australian Institute of Health and Welfare.
Medicare claims for 2023–24 show the pattern in general practice. The figures are non-hospital, non-referred attendances, such as GP visits, using the Modified Monash categories:
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| Area Area |
GP attendances per person GP attendances per person |
Share bulk billed Share bulk billed |
|---|---|---|
| Metropolitan (MM 1) Metropolitan (MM 1) |
6.3 6.3 |
77% 77% |
| Regional centres (MM 2) Regional centres (MM 2) |
6.0 6.0 |
74% 74% |
| Large rural towns (MM 3) Large rural towns (MM 3) |
6.2 6.2 |
78% 78% |
| Medium rural towns (MM 4) Medium rural towns (MM 4) |
6.4 6.4 |
80% 80% |
| Small rural towns (MM 5) Small rural towns (MM 5) |
6.0 6.0 |
80% 80% |
| Remote communities (MM 6) Remote communities (MM 6) |
4.1 4.1 |
78% 78% |
| Very remote communities (MM 7) Very remote communities (MM 7) |
3.3 3.3 |
88% 88% |
Source: Rural and remote health, Australian Institute of Health and Welfare. A high bulk-billing rate in a very remote community does not replace the visits that never happen. The rates above are for 2023–24, before bulk billing incentives were extended to every Medicare-eligible patient on 1 November 2025.
Aboriginal and Torres Strait Islander health services
In 2020–2022, life expectancy at birth was 71.9 years for First Nations males and 75.6 years for First Nations females. For non-Indigenous Australians the figures were 80.6 years for males and 83.8 years for females. The gap was about 8.8 years for males and 8.1 years for females. The AIHW treats life expectancy as a summary of socioeconomic conditions, health risks, and access to care. It warns against lining these estimates up across censuses as a simple trend, because the way people are identified in deaths and population data changes. Targeted health care has contributed to longer lives. The same report is clear that health services alone do not close the gap while socioeconomic disadvantage remains. Source: Life expectancy at birth, Aboriginal and Torres Strait Islander Health Performance Framework.
The Australian Government funds community-controlled Aboriginal and Torres Strait Islander primary healthcare organisations. Source: The Australian health system, Department of Health, Disability and Ageing. In 2022–23 there were 213 First Nations-specific primary health care organisations, and 148 of them, 69%, were run by Aboriginal Community Controlled Health Organisations. Those organisations provided about 3.7 million episodes of care. About 86% of episodes were for First Nations clients, and about 88% of episodes were provided by Aboriginal Community Controlled Health Organisations. The same AIHW report describes a relative lack of primary care, sharpest in remote areas where the need is greatest, and reports that 30% of First Nations people had needed health care but had not seen a provider at least once in the previous 12 months. The summary does not attach a survey year to that 30% figure. Source: Access to primary health care, Aboriginal and Torres Strait Islander Health Performance Framework.
A station on rural access, bulk billing, or Aboriginal and Torres Strait Islander health is practised in the MMI interview guide.
Autonomy, beneficence, non-maleficence, and justice are set out in the four pillars of medical ethics.
When you can say who pays, what a public patient gives up in choice of doctor, and where access thins out, you have the picture those questions use.
Australian healthcare questions
How does the Australian healthcare system work?
The Australian Government funds Medicare and the Pharmaceutical Benefits Scheme. State and territory governments run public hospitals, with Commonwealth funding under the National Health Reform Agreement. General practices, private hospitals, and insurers provide care alongside that. Medicare covers public hospital services for a public patient and subsidises many GP, specialist, and test fees. In 2023–24 the health system cost about $270.5 billion, with governments paying the largest shares and individuals paying 16.3% out of pocket.
Is healthcare free in Australia?
Public hospital treatment as a public patient is covered by Medicare, including the emergency department. A GP or specialist visit costs nothing when the practitioner bulk bills. When the charge is above the schedule fee, the patient pays the gap. A medicine co-payment can still apply during a hospital stay. Adult dental care, most physiotherapy, and glasses sit outside ordinary Medicare cover. Extras insurance, public dental clinics, or the patient meets those costs.
What does Medicare cover?
Medicare helps pay for medical services, hospital services, and tests, imaging, and scans. It covers the full cost of public hospital services. It can pay part or all of a GP visit, some psychology, some community nursing after hospital, and basic dental services for children. The benefit is 100% of the schedule fee for a GP consultation, 85% for a specialist, and 75% of the schedule fee for medical costs as a private patient in hospital. Listed medicines are subsidised through the PBS, with a general co-payment of up to $25 in 2026 and a concession co-payment of $7.70.
What is the difference between public and private care?
A public patient is treated according to clinical need. The public system covers the hospital treatment, and the patient does not choose the doctor. A private patient can choose the doctor and the hospital. Medicare still pays 75% of the schedule fee for the medical services, and hospital cover pays some or all of the accommodation and the remaining doctor costs. Fees above the schedule fee can remain with the patient. You can hold private insurance and still choose to be treated as a public patient.
Who can get Medicare?
The Department of Health lists Australian citizens, New Zealand citizens, permanent residents, and people from countries with a reciprocal health care agreement. Reciprocal visitors can also use PBS medicines. Services Australia handles enrolment and sets what a reciprocal agreement covers. Private health insurance is a separate purchase, and it is not required for Medicare.
Why is access to healthcare in Australia uneven?
The subsidy is national. The supply of care is not. In 2023–24, GP attendances averaged 6.3 per person in metropolitan areas and 3.3 in very remote communities. About 7 million people, 27% of the population, live outside the major cities, where distance and fewer specialists make preventive care harder to reach. In 2020–2022, First Nations life expectancy was about 8.8 years lower for males and 8.1 years lower for females than for non-Indigenous Australians. Community-controlled health organisations are a large part of primary care for First Nations people.
Do I need private health insurance in Australia?
No. Private health insurance is optional. Hospital cover lets you be treated as a private patient and can keep you out of the Medicare levy surcharge if your income is over the 2026–27 threshold, above $105,000 for a single person or $210,000 for a family. The surcharge is 1% to 1.5% on top of the 2% Medicare levy. Extras cover helps with dental, optical, and physiotherapy. It does not replace Medicare, and insurers cannot cover most out-of-hospital GP and specialist fees.