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What Does Medicare Cover in Australia?

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Written by Joshua Malin

Reviewed by Steven Spicer

Updated 6 July 2026

Key takeaways

When you’re treated as a public inpatient in a public hospital, Medicare will cover 100% of the costs provided the procedure is medically necessary and listed on the Medicare Benefits Schedule (MBS), although you may have to join a lengthy public waiting list for elective surgeries.
While Medicare covers a lot of medical expenses, there are some vital health services that Medicare doesn’t cover fully, like dental.
If you spend over a certain amount on doctors’ fees and medical tests in a year, the Medicare Safety Net will kick in to help with the costs.

What is Medicare?

Medicare is Australia’s national public healthcare system, providing many Australian residents with access to a range of healthcare services at no or reduced cost. Medicare is funded through tax revenue and provides low to no-cost access to public hospital care, subsidised medicines, GP visits, specialists and tests. While Medicare covers many medical services, it doesn’t cover everything.

With Medicare, you’re fully or partly covered for:

Hospital treatment as a public patient in a public hospital
Medical services provided by doctors, specialists and other health professionals
Tests, imaging and scans
Prescription medicines listed on the Pharmaceutical Benefits Scheme (PBS).

Keep in mind that Medicare doesn’t cover all medical treatments and operations. Here are some services Medicare typically won’t cover:

Dental care
Ambulance services
All private hospital costs
Medical devices, such as hearing aids
Optometry items like glasses, contact lenses and laser eye surgery.
Cosmetic surgery

What does Medicare cover in hospital?

When you’re admitted as an inpatient to a public hospital, Medicare covers the full cost for you to be treated as a public patient by a doctor. This includes accommodation, medical services and procedures listed on the Medicare Benefits Schedule (MBS). As a public patient, you’ll be placed on a public hospital waiting list for the surgeries and treatments you need.

Medicare pays your healthcare costs in line with the Medicare Benefits Schedule (MBS), which is a list of services for which Medicare will pay some or all of the costs. The MBS includes a fee for each service and for private hospital patients, Medicare covers 75% of the schedule fee.

If you’re admitted as a public patient, you will have no choice of the doctor assigned to you, and private rooms are only available to those who need them most. A benefit of being admitted as a private patient, in either a public or private hospital, is you can choose your doctor and you can be given a private room (both subject to availability). Being a private patient can be expensive and hospital cover helps cover these costs. If you visit the hospital but are not admitted (say for an appointment to have tests or to see a specialist), this is considered an outpatient service and will not be fully covered by Medicare. Medicare will only pay 85% of the MBS fee an outpatient treatment or service. You’ll then need to pay the remaining out-of-pocket fees, including anything extra if your doctor or specialist charges above the MBS fee.

What doesn’t Medicare cover in the hospital?

Medicare won’t fully cover private patient hospital costs, elective cosmetic surgery, overseas medical expenses or ambulance services. Anything not listed in the Medicare Benefits Schedule (MBS) is also excluded from Medicare cover.

Medicare won’t cover the following:

Entire private patient hospital costs. Medicare covers 75% of MBS-listed services and treatments within a private hospital, and you or your health insurer cover the remaining 25%, depending on your policy. If the specialist charges more than the MBS, you’ll also pay the difference – this is called ‘the medical gap’.
Elective cosmetic surgeries. Procedures must be medically or clinically necessary to receive a Medicare benefit or coverage under private health insurance.
Overseas hospital and medical expenses incurred while outside of Australia, unless that country has a Reciprocal Health Care Agreement with Australia.
Ambulance services. Only two state governments (Queensland and Tasmania) pay for emergency ambulance services within their states. Residents of other states can take out ambulance cover to help reduce potential out-of-pocket expenses.

What does Medicare cover for out-of-hospital medical care?

Medicare does cover out-of-hospital medical care through paying 100% of the Medical Benefits Schedule (MBS) fee for general practitioner (GP) consultations and 85% for specialist consultations. Some services covered by Medicare include consultations, tests, scans, x-rays, eye tests and psychological services through a mental health plan.

When you have a consultation with a GP or a specialist, Medicare covers you at the following percentages:

100% of the Medicare Benefit Schedule (MBS) fee for seeing a bulk-billing GP. However, some GPs charge more than the MBS scheduled fee. When this happens, you’ll need to pay the gap.
85% of the MBS fee for seeing a medical specialist. You pay the remaining 15%, plus extra if the specialist charges above the MBS.

Medicare also covers all or part of the costs for the following services:

Tests and scans, such as x-rays
Medically necessary inpatient surgery for items listed on the MBS
Eye tests by optometrists
Certain necessary dental surgeries performed by an approved dentist
Psychology services through the mental health care plan.

What does private health insurance cover that Medicare doesn’t?

Man buys medication covered by Medicare through Pharmaceutical Benefit Scheme

Private health insurance helps cover private hospital treatment and outpatient services not covered Medicare. Hospital cover helps pay benefits towards private hospital care, including accommodation, theatre fees and doctor/specialist services. Extras cover (also known as general treatment or ancillary cover) can help with the costs of a range of outpatient services and treatments.

While Medicare will pay 75% of the MBS fee for private hospital treatment, hospital cover will cover the remaining 25% and may help reduce your gap fee. The specific treatments you’re covered for will depend on what’s included in your policy.

Medicare does not cover most dental services, physiotherapy, occupational therapy, speech therapy, eye therapy, chiropractic services, podiatry and acupuncture services. These services can be covered under extras cover (also known as general treatment or ancillary cover).

Without extras health insurance, you’ll likely have to pay the full cost of these services yourself. Extras insurance is designed to pay a benefit towards out-of-hospital medical care not covered by Medicare. Private extras cover may be cheaper than if you paid for these services out-of-pocket, particularly if you use these services regularly. With so much value on the table, it’s worth comparing cover options to find a great deal.

Our free health insurance comparison tool makes it easy to weigh up a range of extras policies to see which covers the services and treatment you require at a competitive price.

Which pharmaceutical medication does Medicare cover?

Medicare will help reduce the cost of eligible medicines listed under the Pharmaceutical Benefits Scheme (PBS). You’ll pay part of the cost of most prescription medicines, and the PBS will cover the rest. Concession cardholders may be eligible for an even lower price.

It’s worth noting that not all prescription medications are on the PBS, so consult with your health professional for further clarification regarding the cost of prescribed medications. You may be able to claim some non-PBS medications through your extras health insurance, depending on your policy.

How does bulk billing work?

Bulk-billing is when your doctor charges the exact amount that Medicare covers, meaning no out-of-pocket expenses for you. If your doctor doesn’t bulk bill, you pay the difference between what they charge and what Medicare covers as an out-of-pocket cost.

For example, Taylor is sick and decides to visit a general practitioner (GP) and the Medicare Benefits Schedule (MBS) fee for that visit is $40. However, the GP charges Taylor $100, which is above the MBS fee. The difference ($60) is called the gap payment, and this is the amount Taylor must pay.

What is the Medicare Safety Net?

The Medicare Safety Net is a government initiative designed to reduce your out-of-pocket medical costs if you require regular doctor visits and tests. The Safety Net kicks in when you spend over a certain threshold within a calendar year – this threshold then resets at the beginning of the new year.

While your doctors’ visits and tests will still cost you the same, you’ll receive a higher amount back from Medicare if you exceed the thresholds for certain Medicare services.

Who can enrol in Medicare?

Medicare is available to Australian citizens, New Zealand citizens in specific circumstances and Australian permanent residents. Those applying for permanent residency, specific temporary residents covered by a Ministerial Order and citizens and permanent residents of Norfolk Island, Cocos (Keeling) Islands, Christmas Island and Lord Howe Island are also eligible for Medicare services.

How do you claim a Medicare rebate?

A Medicare rebate can be claimed instantly at your doctor’s office or at the hospital. If your health provider doesn’t offer on-the-spot electronic claiming, you can claim online, through the Medicare app, a Medicare service centre or by mail but these methods will take longer. You’ll also need to have paid your invoice and be registered in Medicare before you can claim.

In addition to claiming at the point of contact (doctor or hospital), you can also claim through:

Your Medicare online account via myGov
The Express Plus Medicare mobile app
One of Medicare’s service centres
The Medicare claim form, which you post to Medicare
Over the phone by calling Medicare (simply relay your Medicare number, bank account details and service provider’s receipt).

How is Medicare funded in Australia?

The Australian Government funds Medicare via the Medicare levy and the Medicare Levy Surcharge (MLS). Depending on your circumstances and income, you may have to pay one or both of these as part of your income tax each year.

The Medicare levy is charged at 2% of your taxable income on top of the tax you pay. Most Australians have to pay the Medicare levy but some low-income earners may be exempt or only required to pay a reduced amount. Foreign residents, non-residents, and those not eligible for Medicare can also claim exemptions.

The MLS is an additional tax for higher income earners on top of the Medicare Levy paid by all Australian taxpayers. Australian residents who do not have a private health insurance hospital policy and earn over $105,000 as a single (or $210,000 as a couple/family) are required to pay an additional 1-1.5% tax via the Medicare Levy Surcharge.

What does a blue Medicare card cover?

A blue Medicare card, also called an interim card, is issued to people who have applied for permanent residence in Australia or are covered by a Ministerial Order. Blue Medicare cards offer benefits similar to the standard green cards, including free treatment in public hospitals, cheaper medicines and subsidised doctors’ visits.

If your application for a blue Medicare card is rejected, you can apply to stay enrolled in Medicare and maintain your interim card if you lodge an appeal. However, if you don’t lodge an appeal or your appeal is also rejected, you’ll no longer be eligible for Medicare.

Can I still access Medicare if I have private health insurance?

Yes, you can still access Medicare if you have private health insurance, whether you have a hospital or an extras policy, or both.

The benefit of having a hospital policy is that you can be treated at a private hospital as a private patient with your choice of doctor, and you can avoid longer public hospital waiting lists. With an extras policy, you can reduce your out-of-pocket expenses for the services Medicare doesn’t cover outside of the hospital setting, such as dental, physio or optical.

Meet our health insurance expert, Steven Spicer

Steven Spicer

Executive General Manager – Health, Life & Energy

As the Executive General Manager of Health, Life and Energy, Steven Spicer is a strong believer in the benefits of private cover and knows just how valuable the peace of mind that comes with cover can be. He is passionate about demystifying the health insurance industry and advocates for the benefits of comparison when it comes to saving money on your premiums.