Home Health A guide to the Health Care System in Australia

A guide to the Health Care System in Australia


How Medicare works

Australia has a scheme called Medicare that gives its residents access to healthcare. It is a government plan that provides all its citizens access to a range of health services at little or no cost. Medicare is funded through general revenue and Medicare Levy. The Medicare Levy is a 2% tax paid by Australians that earn over $27,069 and an additional surcharge call Medicare Levy Surcharge of 1% which is paid by citizens who have a high income and don’t own any private health insurance plan.

Australians buy private health insurance policies to avoid Medical Levy Surcharge and have more extensive health cover as Medicare does not cover important health services such as ambulance services, dental treatments, physiotherapy and costs of eye glasses, hearing aids.  Private health insurance gives them more control on their healthcare, choice of doctor as well as choice of the services needed.

If you are using Medicare and you want to visit a specialist you will need a GP referral and also be prepared to face long waiting times which isn’t the case if you have a private insurance plan. So, the government of Australia encourages its citizens to go for a private health plan to reduce the load on Medicare.

How Private Health care can save Medicare Levy Surcharge

If you are single and earn an income of over $90000, or if your family income put together is more than $180,000 and don’t have an appropriate private health insurance cover, then the Medicare Levy Surcharge can add up.

If you fall in the Tier 1 bracket you will have to pay a minimum amount of $900 as a single. In the highest income bracket you will have to pay a minimum amount of $2100. If your family’s annual income is more than $180,000, you will have to pay a tax of minimum $ 1,800 a year whereas families in highest income bracket will have to pay $ 4,200 for not having the right health cover.

You can avoid paying the Medicare Levy Surcharge, if you have the right level of health insurance for you and your dependants. It you don’t have private cover, then as your income increases over time, the amount you pay as this extra tax also increases.

Getting private cover can become cheaper than paying tax surcharge. Check on https://www.iselect.com.au/health-insurance/tax/medicare-levy-surcharge/ for the right guidance on what amount of tax you can save and instead purchase a private health cover for its added benefits. Paying for private hospital cover will save most of your tax money.

But choosing the right plan at the right price is not simple. Private health premiums depend on the cost of health care and the type of cover you want; so it is important to look at your individual requirement. You can compare health insurance policies on iSelect. You just have to create an account and enter your details and requirements. The trained experts at iSelect will compare the policies of their partnered insurance providers and provide you with a free quote. This will make it easier for you to select a policy.