Medicare is Australia's universal public health insurance system, funded partly by a 2% Medicare Levy on taxable income. It provides free or subsidised access to doctors, hospitals, and medicines. The Australian Citizenship Test may ask about Medicare as part of the rights and responsibilities of Australian citizenship.
Medicare is Australia's universal public health insurance scheme, providing all Australian citizens and permanent residents with access to free or low-cost medical treatment. For the Australian Citizenship Test, understanding Medicare — what it is, who funds it, and what it covers — demonstrates your knowledge of the rights and benefits of Australian citizenship.
According to the Department of Home Affairs, knowledge of Australia's social services — including healthcare — reflects an understanding of the Australian way of life that underpins the citizenship test.
What Is Medicare?
Medicare was introduced in Australia on 1 February 1984 by the Hawke Labor government. It replaced an earlier scheme called Medibank. Medicare is a universal health insurance system — meaning it covers all eligible Australians regardless of their income, employment status, or pre-existing conditions.
Medicare is administered by Services Australia (formerly the Department of Human Services) and is one of the most significant social programs in Australian history.
Who Is Eligible for Medicare?
The following people are eligible to enrol in Medicare:
- Australian citizens (including new citizens)
- Australian permanent residents
- New Zealand citizens living in Australia
- Citizens of countries with a Reciprocal Health Care Agreement with Australia (including the UK, Ireland, Italy, Sweden, Netherlands, Belgium, Finland, Norway, Slovenia, and Malta) — for the duration of their visit
Temporary visa holders (other than those from reciprocal agreement countries) are generally not eligible for Medicare, which is one of the practical benefits of becoming an Australian citizen or permanent resident.
What Does Medicare Cover?
Medicare provides benefits across three main areas:
1. Medical Services (Medicare Benefits Schedule)
Medicare subsidises visits to doctors, specialists, and other health professionals listed on the Medicare Benefits Schedule (MBS). This includes:
- General Practitioner (GP) visits — fully covered when bulk billed
- Specialist consultations (75–85% of the scheduled fee)
- Diagnostic tests — blood tests, X-rays, MRIs
- Eye tests by optometrists
- Some allied health services when referred by a GP under a care plan
2. Public Hospital Treatment
Medicare covers free treatment as a public patient in a public hospital. This includes accommodation, nursing care, and medical treatment by the hospital's doctors. You cannot choose your own doctor as a public patient, but all essential care is provided at no cost.
3. Medicines (Pharmaceutical Benefits Scheme)
The Pharmaceutical Benefits Scheme (PBS) operates alongside Medicare to subsidise the cost of prescription medicines. Without the PBS, many medicines would be unaffordable for ordinary Australians. The PBS is a key reason why Australian healthcare is considered among the best in the world.
What Medicare Does Not Cover
Medicare does not cover everything. Important exclusions include:
- Dental treatment (except for limited emergency situations)
- Ambulance services (covered by state schemes or private insurance)
- Physiotherapy, chiropractic, and most allied health services (unless under a GP care plan)
- Cosmetic procedures
- Private hospital accommodation (you need private health insurance for this)
- Overseas medical costs
Know Your Rights as a New Australian Citizen
Our practice tests cover Medicare, citizenship rights, and the Australian way of life — all tested areas in the citizenship test.
Try Free Practice TestsHow Is Medicare Funded?
Medicare is funded through three sources:
- The Medicare Levy — a 2% tax on taxable income paid by most Australian taxpayers
- The Medicare Levy Surcharge — an additional 1–1.5% for higher-income earners who do not hold private hospital insurance
- General federal government revenue
The Medicare Levy is one of the most well-known tax obligations for Australian residents. Understanding it is part of understanding your responsibilities as an Australian citizen or permanent resident.
Medicare and Australian Values
Medicare reflects core Australian values that are central to the citizenship test: the belief that all Australians — regardless of wealth — deserve access to quality healthcare. This principle of fairness and equality is emphasised in the official "Our Common Bond" resource.
New citizens often cite Medicare as one of the most valued aspects of Australian life. The system reflects Australia's commitment to a fair go for everyone — a value deeply embedded in Australian culture and tested in the citizenship test.
Private Health Insurance in Australia
While Medicare provides universal coverage, many Australians also hold private health insurance. Private insurance provides benefits including:
- Treatment as a private patient in hospital (choice of doctor)
- Coverage for dental, optical, physiotherapy, and other extras
- Shorter waiting times for elective surgery
- Avoiding the Medicare Levy Surcharge (for higher-income earners)
The government encourages private health insurance through financial incentives including the Private Health Insurance Rebate.
Preparing for the Citizenship Test
For the Australian Citizenship Test, focus on the following key facts about Medicare:
- Medicare is Australia's universal public health insurance scheme
- It is available to citizens and permanent residents
- It is funded partly by the 2% Medicare Levy
- The PBS subsidises prescription medicines
- Medicare was introduced in 1984
Use our Study Guide to review rights and responsibilities, and test your knowledge with our practice tests — which include questions on Medicare and other citizenship benefits.
Frequently Asked Questions
Does Medicare cover dental treatment in Australia?
Generally no. Medicare does not cover most dental treatment. Australians typically need private health insurance (extras cover) or pay out of pocket for dental care. There are some limited government dental programs for concession card holders and children.
When was Medicare introduced in Australia?
Medicare was introduced on 1 February 1984 under the Hawke Labor government. It replaced the earlier Medibank scheme.
What is the Medicare Levy?
The Medicare Levy is a 2% tax on taxable income paid by most Australian taxpayers to help fund Medicare. Higher-income earners without private health insurance also pay a Medicare Levy Surcharge of 1–1.5%.
Is Medicare mentioned in the Australian Citizenship Test?
Medicare may be referenced in questions about the rights and benefits of Australian citizenship and the Australian way of life. Understanding Australia's social services — including Medicare — is part of demonstrating your knowledge of Australian society.
Can new Australian citizens access Medicare immediately?
Yes. Once you become an Australian citizen or are granted permanent residency, you are eligible to enrol in Medicare through Services Australia. You can enrol online, by phone, or at a Medicare service centre.