How does the healthcare system work?

Australia's healthcare system is made up of both government-funded and private organisations. The federal government pays for the cost of healthcare under the Medicare system.

Public hospital healthcare is free to all Australian citizens and permanent residents.

Private health insurance is not compulsory, but Australians are encouraged to buy private health insurance in addition to having Medicare. There are many different types of private health insurance policies.

If you have private health insurance, you can choose to be treated in a public or private hospital.

What are the differences between private and public hospitals?

Public hospitals are those owned and run by the government. Private hospitals are those owned by the private sector but are still licensed by the government. The costs involved in going to hospital depend on whether you are a public or private patient.

If you have a Medicare card, you can be treated as a public patient in a public hospital, and most of your costs will be covered by Medicare.

If you have private health insurance, you can choose to be a private patient in either a public or private hospital. A combination of Medicare, private health insurance and out-of-pocket costs will cover your stay.

Learn more about choosing between public and private care for your pregnancy and birth on the Pregnancy, Birth and Baby website.

Why might I choose a public hospital?

Australia's public hospitals provide high quality medical for free to anyone with a Medicare number.

They tend to be more accessible, especially in rural areas. Public hospitals may have better medical facilities for your condition than private hospitals and are usually equipped to handle more complex medical situations.

If you are admitted as a public patient to a public hospital:

• You will be treated by doctors selected by the hospital.
• You will not be charged for medical services, hospital accommodation and other relevant services.
• Your follow-up care will be provided in an outpatient clinic run by the hospital.

For these reasons, public hospitals are usually the first choice for emergencies or acute health issues. The majority of emergency department and outpatient services in Australia are provided by public hospitals.

If you are admitted to the emergency department of a public hospital, you will be covered by Medicare. Emergency departments in private hospitals may charge a fee, which might be covered by your private health insurance, if you have coverage.

Why might I choose a private hospital?

If you choose treatment in a private hospital, you may have more options:

• You can choose your own doctor (some doctors only work in a private hospital).
• Waiting times for elective (planned) surgery are usually shorter.
• You may be able to choose when to book elective surgery (depending on availability).
• You may get extra services, such as a private room.
• Your doctor will usually provide follow-up care in their private rooms.

Can I be a private patient even if I don't have private health insurance?

You can choose to be a private patient in a private hospital even if you do not have private health insurance. You will have to pay for most of the fees yourself, but Medicare will pay for 75% of the schedule fee. You are responsible for any excess costs.

What does Medicare cover?

Medicare is the Australian government's public health care system that helps you access a wide range of health services for free or at lower cost. Everyone in Australia with a Medicare number is entitled to:

• free treatment as a public patient in a public hospital, paid for by Medicare
• doctor visits and some medical tests partly or fully paid for by Medicare
• a reduced cost for many prescription medicines, subsidised by the Pharmaceutical Benefits Scheme (PBS)

If you have a chronic health condition or a mental health disorder, you may be eligible for some allied health services that are partly or fully paid by Medicare. Speak to your doctor to see if you are eligible.

Ambulance services are not covered by Medicare. In some states, the state government pays for ambulance services. In other states, you can pay privately for ambulance cover. Some private health insurance policies include cover for ambulance services.

If you are a private patient in a private hospital, Medicare will also cover some of your costs.

If you are new to Australia, you can check with Services Australia to see if you are eligible for Medicare or other benefits.

To find out more about what is covered by Medicare, you can visit the Services Australia — Medicare costs website.

What does private health insurance cover?

Private health insurance may cover services that Medicare doesn't cover.

There are different private health insurers in Australia that offer different levels of cover. It's important to check what is and isn't covered by your policy.

Private health insurance can be divided into 3 types of cover:

• Hospital insurance — This is for treatment in a public or private hospital.
• General treatment (also called ancillary or extras) insurance — This is for treatment outside hospital, which is not generally covered by Medicare, such as dental or allied health services. Different policies include coverage of different services and different levels of cover.
• Ambulance cover — This may be included in your hospital or general treatment cover, or separately. The options differ depending on what state or territory you live in.

If you need to go to hospital, most private hospital insurance policies let you choose:

• your treating doctor or specialist
• whether to receive treatment as a private patient in a private or public hospital

Depending on your policy, there may be hospital costs that your private insurance doesn't cover. You may also need to pay an out-of-pocket amount (called an excess) towards your hospital costs.

Health funds require a waiting period after signing up before you're covered by the policy.

Check with your fund which costs you're covered for before you choose care in a private hospital.

If you have private health insurance, you are still entitled to free care in a public hospital. For more information on claiming Medicare when you have private health insurance, visit the Services Australia — Private health insurance and Medicare website.

What does it mean to be a private patient in a public hospital?

If you are admitted to a public hospital, you can let the hospital know that you would like to be a private patient. If you choose to be treated as a private patient in a public hospital:

• You will receive treatment from your own doctor.
• You may have a single room, if one is available.
• You may be transferred to a private hospital for follow-up care.
• You will usually receive outpatient care by same doctor in their private rooms.

If you are a private patient in a public hospital, you will pay for your hospital accommodation, theatre fees and doctors' fees. Some of these may be covered by your private health insurance. Medicare will subsidise your doctors' fees.

How do I decide?

Deciding whether to go to a public or private hospital can be confusing, especially when you are unwell.

You might have previous experience in a public or private hospital, or you can take advice from friends, family or your doctor when choosing a hospital. Your choice will also depend on your health condition, where you live and whether you want to choose your doctor.

It is important to consider what your private health fund will cover, if you have one. Ask your insurer about:

• any out-of-pocket costs
• waiting periods
• what facilities are available in your area

You can learn more about private health insurance at the Private Health Insurance Ombudsman website. The Australian government’s Medical Costs Finder tool can help you find and understand the cost to see a GP or medical specialist.

Resources and Support

For more information on Medicare benefits for hospital stays and treatments, visit the Services Australia website.

For an overview of private health insurance and the different funds available in Australia, visit the PrivateHealth.gov.au website.