What is Medicare?
Medicare is a government-funded service that provides a range of benefits, including free care in public hospitals, and lower costs to buy prescription medicines. Medicare also provides access to:
- Free or subsidised treatment by health professionals. A few of these include doctors, optometrists, dentists and other allied health practitioners.
- The Medicare Schedule fee for services and procedures in public hospitals can be discounted by up to 75% (not including hospital accommodation and costs such as medication and theatre fees).
All Australian citizens, New Zealand citizens, Australian permanent residents, those who have applied for a permanent visa, or those covered by a Reciprocal Health Care Agreement with another country are eligible to access Medicare services.
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What is Medicare Levy?
As Medicare is a government-funded service, it is partly financed by taxpayers paying an extra tax called the Medicare Levy.
If your taxable income is above a certain threshold, you will need to pay a Medicare Levy of 2%. If your taxable income is below the threshold, your Medicare Levy is reduced. Some Australians might not have to pay the levy at all because their income is below the minimum threshold.
Find out what level of Medicare Levy you will pay this tax year with the ATO Medicare Levy Calculator.
What is the Medicare Levy Surcharge?
In order to encourage Australians to take out private health insurance, the Medicare Levy Surcharge (MLS) is an extra tax that is paid by high income earners (Australian taxpayers on a high income) who do not have any private health insurance. This is to help reduce demand in public hospitals on the Medicare system.
All in all, Australia is a pretty lucky country when it comes to our public health system – more than just “golden soil and wealth for toil” here. But there are still many benefits to be gained from signing up to the private health system on top of the public health system if you can afford it.