Australia's public healthcare system

The Australian healthcare system is made up of a mixture of services funded by the Australian Government and private health insurance. Australian residents are automatically covered for many hospital and medical costs under the Government’s Medicare scheme, however, many choose to take out additional cover for medical expenses with private health insurance.

Medicare is a national scheme providing Australian residents (and some overseas visitors with Reciprocal Benefits) with free or subsidised health services (check your eligibility here). Medicare will cover the costs for part or all of the following services:

seeing a GP or specialist
tests and scans, like x-rays
most surgery and procedures performed by doctors
eye test by optometrists.

Medicare won't pay for medical services like:

ambulance services
most dental
services
glasses, contact lenses and hearing aids
cosmetic surgery.

How does Medicare relate to OSHC and OVHC?

For international students and visitors who may not be covered under Medicare, you can purchase Overseas Visitor Health Cover (OVHC) or Overseas Student Health Cover (OSHC) depending on your visa type. These policies (with the exception of Budget Working and Budget Visitor Cover) provide you with a level of cover that is similar to the benefits Australians get from Medicare.

The Medicare Benefits Schedule (MBS) is a list of medical services (e.g. a standard consultation with a GP or surgery in hospital) subsidised by the Australian Government with a fee (known as a 'schedule fee') payable for each item.

The schedule fee is the amount the government considers appropriate for one of these services and determines the amount that Australians receive when they claim a medical service through Medicare. This schedule fee is then used to determine the benefit OSHC and OVHC policyholders are eligible for when receiving medical treatment in Australia. Some providers charge only the MBS fee; other providers can charge more than the MBS fee, which creates a gap or out of pocket expense. You should always check with your provider if they charge a gap fee prior to seeking treatment.

The applicable policy wording document clearly outlines the benefits covered under your chosen policy. More information about OSHC is available here, and OVHC here.