Health system explained

Health system explained

Navigating the health system can be confusing and when you actually need health care is when you are least likely to have the time to learn about it.

In this section, you'll find some useful information to help you find your way and get the most from your health care.

The Australian health system

The Australian health system provides all Australian residents with access to affordable, accessible and high-quality health care.* This Government scheme, known as Medicare, is typically referred to as 'public health care'. To find out more visit

Private health insurance

Private health insurance is available for those who wish to cover the costs of becoming a private patient. Private patients have more control in choosing their treating doctor in hospital and in some instances can reduce their waiting time for elective surgery by having treatment in a private hospital.

Private health insurance also offers cover for some or all of the costs of other services not covered by Medicare, such as ambulance services, dental, optical items, physiotherapy, prescription pharmaceuticals (non-PBS) and a wide range of other services.

You can choose whether to have Medicare cover only or a combination of Medicare and private health insurance.

Unlike other insurances, your premium is not affected by your age, health status or other risk factors. This is called community rating and it protects from having to pay higher premiums if we make a claim, or as we get older, or if we get sick.

The Australian Government regulates private health funds but rules regarding membership vary between funds and in some cases will vary between States. All health funds have certain waiting periods and other conditions that apply before benefits are payable.

The Australian Government offers a rebate on private health insurance premiums. This rebate is available to Australian residents who are eligible for full Medicare benefits.

Lifetime Health Cover is another Federal Government initiative to encourage people to take out private health insurance early in life and continue to maintain it.

Pharmaceutical Benefits Scheme (PBS)

Australia also has a national system for subsidising listed prescription medicines. The PBS subsidises the cost of over 1,350 essential items, ensuring all Australian residents have access to necessary and lifesaving medicines at an affordable price. This scheme is only available to people who are eligible for Medicare.

How is private health insurance regulated?

The Australian Government regulates private health insurers, who must be registered under the Private Health Insurance Act. The policies they sell must comply with statutory regulation. These are the only health insurance products which can be sold in Australia and attract a Government rebate (see Calculating your Premium).

Australia's private health insurers are also monitored and regulated by an independent statutory authority known as the Private Health Insurance Administration Council (PHIAC). A second independent authority, the Private Health Insurance Ombudsman (PHIO) HOTLINE 1300 362 072^, is a service to help consumers with private health insurance problems and enquiries.

All private health insurers are required to keep up-to-date standard information statements (SIS) of every resident product they sell. Visit and to access these statements.

^Free call anywhere in Australia; mobile charges may apply.

Calculating your premium

Unlike other insurances, health insurance premiums are not calculated on 'risk' factors. The community rating system means everyone pays the same premium for their private health insurance. Factors such as age, gender, race, health status, lifestyle choices or claiming history cannot be taken into account in calculating your premium.

The Australian Government has a number of initiatives aimed at making it more affordable for Australians to take up private health insurance. Find out more in our benefits section.

About to go to hospital?

We understand that going to hospital can be quite a daunting experience and you're probably not entirely sure what to expect. Before you go, check out our Going To Hospital Guides.

* Medicare does not provide cover for ambulance services. Ambulance services in Australia are on a 'fee for service' basis provided by State Governments, and because of the Australian geography may be expensive.Tasmania and Queensland have State schemes that cover ambulance services for residents of those States.

Please note: overseas students and visitors on temporary visas are not eligible for Medicare benefits, unless they are from a country with which Australia has a 'Reciprocal Health Care Agreement'. See the sections on overseas students and overseas visitors for further information about health insurance covers appropriate for your needs.