International Profiles of Health Care Systems

What is the role of government?

Three levels of government are collectively responsible for providing universal health care: federal; state and territory; and local. The federal government mainly provides funding and indirect support to the states and health professions, subsidizing primary care providers through the Medicare Benefits Scheme (MBS) and the Pharmaceutical Benefits Scheme (PBS) and providing funds for state services. It has only a limited role in direct service delivery.

States have the majority of responsibility for public hospitals, ambulance services, public dental care, community health services, and mental health care. They contribute their own funding in addition to that provided by federal government. Local governments play a role in the delivery of community health and preventive health programs, such as immunization and the regulation of food standards.1

Who is covered and how is insurance financed?

Publicly financed health insurance: Total health expenditures in 2014–2015 represented 10.0 percent of GDP, an increase of 2.8 percent from 2013–2014. Two-thirds of these expenditures (67.0%) came from government.2

The federal government funds Medicare, a universal public health insurance program providing free or subsidized access to care for Australian citizens, residents with a permanent visa, and New Zealand citizens following their enrollment in the program and confirmation of identity.3 Restricted access is provided to citizens of certain other countries through formal agreements.4 Other visitors to Australia do not have access to Medicare. Medicare is funded in part by a government levy collected through the tax system, which raised an estimated AUD10.3 billion (USD6.7 billion5 ) in 2013–2014.6 (In July 2014, the levy was expanded to raise funds for disability care.)

Private health insurance: Private health insurance (PHI) is readily available and offers more choice of providers (particularly in hospitals), faster access for nonemergency services, and rebates for selected services. Government policies encourage enrollment in PHI through a tax rebate and, above a certain income, a penalty payment for not having PHI (the Medicare Levy surcharge).7 The Lifetime Health Coverage program provides a lower premium for life if participants sign up before age 31. For people who do not sign up, there is a 2 percent increase in the base premium for each year after age 30. Consequently, take-up is highest among those 30 and under but rapidly drops off as age increases, with a trend to opt out starting at age 50.

– The Commonwealth Fund

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