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The Rising Cost Of Expat Healthcare In Australia

Australia is known to have a healthcare system of exceptional standards. This is one of the reasons the country’s life expectancy is among the highest in the world. The primary governing principle behind Australia’s healthcare is that it is a hybrid of both private and public service provision. In simpler words, it is like a cross between the National Health Service (NHS) in the United Kingdom and the fully privatized system in the United States.Residents have access to a wide range of public and private medical facilities. Unfortunately, unlike the NHS, there is no free universal healthcare for expats in Australia.

This means that foreigners who move to this country to live and work on a temporary basis have access to the best medical care available in the public and private sectors. However, they will have to pay for both. The “user pay” principle, on which Australia’s healthcare system is based, ensures that an expat is required to pay for everything, from a visit to the General Practitioner to staying in a hospital.

Fortunately, Australia has Reciprocal Health Care Agreements (RHCA) with 10 countries, which are New Zealand, the UK, the Netherlands, Italy, Malta, Finland, the Republic of Ireland, Norway, Sweden and Belgium. Nationals from these countries can benefit from certain exceptions, like:

– Free treatment in a public hospital (in-patient and out-patient)
– Subsidized drugs
– Medical treatment by healthcare providers at surgeries as well as community health centers

As an outsider living in the country, it is absolutely essential that you understand the level of access to Australian Healthcare a reciprocal agreement can offer. In most cases, it is limited to immediate, necessary care within the public health system in the country.

Compulsory Private Health Insurance

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If you are moving to this country as an expat on a work permit, you will have to prove to the Australian authorities that you are adequately covered by a minimum amount of private health insurance. In fact, this is one of the criteria for the government to grant you the visa. To know more about the minimum level of insurance you need to show, refer to the website of the Department of Immigration And Citizenships (DIAC).

Do bear in mind that you are obligated to get a private health insurance cover to qualify for a visa, even if your home country has an RHCA with Australia. You can only sign up for Medicare once you enter the country. If you are from a nation that has an RHCA with Australia, you will need to enroll in Medicare after arrival and then obtain an exemption from the DIAC.

Unfortunately, private healthcare insurance is not only compulsory but also extremely expensive in Australia. Some expats pay more than AU $ 500 (US $ 377; £ 285; € 337) per person, per month. The worst part is that while there are several private medical facilities, none of them handle emergency services. This means that even on a private health insurance plan, you will have to rely on the public healthcare system in an emergency situation.

About Medicare

Medicare is a government-run health insurance scheme that gives you access to a range of basic medical treatments, free of charge. This facility is available to all citizens and permanent residents of the country. It is paid for by the taxes that are levied on individuals’ salaries. Unfortunately, temporary residents in Australia have no access to this scheme.

If you are going to enroll for Medicare, you need to register with them before submitting your passport, travel documents and permanent residency / visa proof. Once the formalities are completed, Medicare will issue a card to you. The process should be initiated within a week of your arrival into the country and it usually takes between 3 and 6 weeks for completion. You will then get a Medicare kit, which explains the entire system as well as its payments and benefits in detail.

The scheme covers treatments in public hospitals completely. It also offers full or partial cover of doctors’ consultation fees (usually in the range of 85% or so). While Medicare doesn’t really make it necessary for you to visit certain doctors, it is mandatory that you get a referral from a GP before consulting a specialist. Any medical practitioner that you visit should have been issued a Medicare Provider number.

Your doctor may either bill Medicare directly or you can choose to pay the fees at that time and claim the rebate via phone, mail or a drop box (239 of them nationwide). The rebate amount will be directly paid into your bank account.

Medicare lets you benefit from the state’s Pharmaceutical Benefit Scheme (PBS) through subsidies on the cost of prescription drugs. However, ambulances (even in an emergency), optometrists, dentists, home care and alternative treatment charges are not covered by Medicare. It is therefore important for you to get some kind of private medical insurance, even if it is a basic plan.

Rising Healthcare Cost & Its Impact

In the last few years, many foreigners living in Australia – especially the pensioners – are returning home because they cannot afford to pay the high healthcare costs. Some are moving to New Zealand or European nations instead.

There are more than 3,000 retirees in Australia, around the age of 75, living on a Subclass 410 Retirement Visa. In the past, such expats could seek a fully self-funded retirement plan in the country. Unfortunately, this option is no longer available to new applicants. Those who are still under the Subclass 410 Retirement Visa and have overseas pensions as well as private health insurance are looking for a way to become permanent residents after spending at least 10 years in the country. This is mainly because they are not covered by Medicare, the state-run insurance scheme.

People who have lived in Australia for a long time claim to have seen an increase of as much as 123% in the cost, over the last 10 years. Many of them also say that they feel vulnerable because they have to prove that they have paid all their premiums when they have to renew their visa or residency permit.

Insurance companies in Australia have also admitted that many of their expat customers have chosen to return home in the last few years, citing the high healthcare costs as the reason. According to Medicare, there has been an average annual increase of 5.64% in the premiums for its 3.9 million customers.

British retirees, who make up a large portion of Australia’s expat population, believe that they are the worst affected by the rising costs, mainly because they are on a frozen pension and cannot afford to pay as high as AU $ 8,500 (US $ 6,386; £ 4,850; € 5,723) per person each year just on health cover. Moreover, this amount only reimburses a part of their hospital treatment. They still pay extra for medicines and other services.

Australian authorities are justifying the increase in healthcare costs. According to them, the expenditure on healthcare takes up a large part of the state and federal budget and has grown by more than 74% in the last decade or so. Some of the spending categories tend to cost more than the others, mainly hospitals, medical services, primary care and pharmaceuticals. They also claim that the overall population in the country, including expats, is not just growing, but also aging and therefore need better facilities. Health inflation has risen at a much higher pace than the Consumer Price Index.

However, these factors actually account for less than 30% of the increase in healthcare costs. The rest is mainly because the residents in all age groups now receive more expensive services per person. They also tend to access treatment more regularly. With advancements in technology, the quality of medical treatment in Australia has definitely improved. Patients today have easy access to services, treatments and medications that did not even exist up to 10 years ago. For example, a typical 50-year old visits a physician more frequently, undergoes more tests and takes more prescription drugs compared to a person of the same age a decade ago.

High expenditure on healthcare services is quite normal in many prosperous first world economies and this can actually be considered a good trend as the increase in price is usually because of better services and extra benefits. It is therefore no surprise that the life expectancy in Australia is among the highest around the globe.

Experts predict that as medical technology progresses further, the residents will enjoy enhanced treatment options in the future too. However, these advancements aren’t likely to be cheap.

The whole objective of compulsory private health insurance is to alleviate financial pressures associated with health issues, including hospital stays and the inability to work because of an injury. It also helps with payments for specialist services like dentists, physiotherapists, chiropractors and optometrists.

Reducing Healthcare Costs With Different Insurers

The rise in Australia’s average health fund premiums cannot be controlled by the people, but there are several things you can do to cut down your personal health insurance costs. First of all, it is important that you get quotations from different insurance companies and compare what they all have to offer. Increasing your excess to reduce your premium is an option you may want to consider.

If you already have private health cover, analyze it to see if it meets your current requirements. Many of us opt for an expensive plan because we believe it may be more comprehensive but never really end up utilizing it to its fullest. So check if you could be paying for cover that you don’t really need.

Even though the cost of health insurance is high all over the country, there is a lot of competition within the industry. Many companies are offering discounted rates for signing up with them online. Others may give you policy add-ons, additional services, bonuses or other similar money-saving incentives just for switching over.

While the chance to save a few hundred dollars may be very tempting, it is essential that you consider these points when comparing various insurers:

– The amount of time the company has been in business
– Which independent industry awards they have won
– Their track record over the last 3 years or so
– Testimonials and feedback from their customers

Getting this information is quite easy thanks to the Internet. However, don’t just go through the company’s website or you won’t get the real picture. For detailed information, try to access the annual reports by the Australian Private Health Insurance Ombudsman on healthcare providers.

Look for the “no frills” companies that have a track record of great customer service. They should have extremely competitive policy options, but at the same time make sure that you are insured for your specific requirements. Do read the Product Disclosure Statement or the Terms and Conditions thoroughly, to know that is covered and what isn’t, so that you don’t face any unpleasant surprises when making an insurance claim.

When it comes to your health, prevention is far better than cure and one of the best ways to beat the rising cost is by keeping yourself fit. This way, you are less likely to need comprehensive covers or go in for various treatments and will end up spending less on your premiums.

Even the health authorities admit that a majority of the health problems the Australians suffer from can actually be prevented by adopting healthier lifestyle choices. At the same time, they advise people to go for regular physical checkups so that the presence of a disease is detected in the earlier stages and the chances of a complete recovery are much higher.

Sources: [1], [2]

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