Important note: The statements made in this paragraph about the cover provided by Flip insurance for accidental injuries and the amount of benefits payable relate to the Flip Active product dated 31 May 2023. That product was withdrawn and replaced with the new Flip Active product on 27 June 2023, which has a different scope of cover for accidental injuries. These statements do not describe the scope of cover under that new product. Please refer to the current Product Disclosure Statement for details of that cover.
The Australian healthcare system is right up there with the best in the world, but it’s complex and trying to understand how it actually works can be a challenge. In true Flip style we’ve put this article together to help you navigate the healthcare system like a pro.
So, how does Australia’s healthcare system work?
Australia has a great healthcare system which is made up of two main parts:
- The public health system: includes public hospitals, community health centres and health organisations owned and operated by the government. Tax-payers fund Medicare so Aussies can access free or low-cost public healthcare.
- The private health system: includes privately owned and run health services like private hospitals, private specialists and pharmacies. People pay for private health insurance or pay directly for private treatment to access these services.
Even with the protection of Medicare and private health insurance, you often end up paying medical costs. We’ll explain why.
What does Medicare cover?
Medicare is a key part of the Australian healthcare system, giving healthcare access to Aussie residents. Funded by taxpayers, it covers:
- treatment in public hospitals, like going to the emergency room or surgery
- all (bulk-billed) or some of the cost of a GP visit
- tests like X-rays and blood tests in public hospitals, and some out of hospital too
- most prescription medications (at a fixed co-payment).
It doesn’t cover:
- treatment in private hospitals
- treatments like private dental and physio
- ambulances (but some state governments do)
- many of the costs that come with recovery after an injury.
What does private health insurance cover?
Health insurance gives you more choice when it comes to your healthcare options and covers some of the things Medicare doesn’t. You pay money (a premium) to an insurer, also called a health fund, and if you’re covered for it, they can help to pay for:
- treatment in a private hospital. This means you can skip the public hospital waitlist, have more access to private rooms and get to choose your doctor (just don’t assume this’ll be completely covered…there might be an excess and other out-of-pocket costs 👇)
- a range of extras like dental, optical and physio (depending on your type and level of cover and only for some services and only up to certain limits)
- ambulance cover (if you aren’t already covered by a state-based scheme).
Private health insurance doesn’t cover:
- GP visits
- consultations with specialists in their rooms
- out-of-hospital diagnostic imaging and tests
- lost income from missing work
- the excess, which is an amount (you may be able to select, depending on your policy) that’s usually between $0-$750 that you might need to pay your health insurer if you’re admitted to hospital (also called inpatient, but we won’t go into that now)
- any treatment you need during a waiting period, which is the amount of time you need to wait after you get your health insurance before you can get treated and claim on specific things. They range quite a bit, it’s often about 2 months for dental and 12 months for pre-existing conditions.
What are out-of-pocket expenses?
There are a bunch of healthcare expenses you’ll likely end up paying even with Medicare and private health insurance, especially for services you need when you’re not in hospital. These are called out-of-pocket expenses or gaps.
Why? Well, sometimes it’s because your costs aren’t covered. For example, most dental services aren’t covered by Medicare (except in certain circumstances like if you hold a Centrelink pensioner concession card).
Other times, even if you are covered for something, there can be a difference (or gap) between what your doctor charges and what Medicare or your insurance will cover. Every year Australians pay about 17% of total health spend directly through out-of-pocket expenses.
Out-of-pocket expenses can add up
Scenario 1 - GP appointment
GPs are the gateway to much of the Australian healthcare system. Medicare covers GP appointments but only covers the full amount if your doctor bulk bills. If they don’t, you’ll pay the difference between the Medicare benefit and the doctor’s fee. Private health insurance doesn't cover GP fees.
Scenario 2 - Physio appointment
If you have private health insurance with physio extras cover, you’ll often have a maximum claim amount. You’ll also have a limit, which is the total amount you can claim for a service in a year. So, you might be entitled to claim say $50 back for each visit but if the physio appointment costs $80, you’ll have to pay the difference. And once you’ve reached your yearly limit, the whole $80 would be out of pocket.
Scenario 3 - Hospital for surgery
Let’s say you tear your rotator cuff while rock climbing. You might see your GP and get some scans. There could be a gap for your GP appointment and for your diagnostic imaging. With the tear confirmed, you decide to go private to get it fixed faster (although this might not always be the case) by your preferred surgeon. Medicare and your private health cover don’t pay for the consultation with your surgeon. When you go to hospital, there’ll likely be an excess to pay and there might be gaps for the anaesthetist and surgeon fees. You also might need help paying for slings, Ubers, painkillers, food deliveries and rehab. All of a sudden, the costs are adding up. Getting Flip for upcoming adventures could help with that…
If you make the decision to get Flip and then get injured you could get a cash payout to help with some of these costs. You get to choose how you spend the payout. Like if you flip on your cover then tear your ACL while you’re skiing and need surgery you could use the $2,000 cash payout on medical bills, recovery physio or anything else.
Or if you flip on your cover then break a bone while playing footy, you could use the $200 cash payout on your sling or Moon Boot from the local medical centre.
Want to help protect yourself from out-of-pocket expenses?
Medicare and private health insurance are the cornerstones of the Australian healthcare system. They refund your costs or pay your provider directly for the things they cover, which as we’ve discussed, isn’t everything.
Flip’s accidental injury insurance can help cover your out-of-pocket expenses if you cop certain types of injuries. With the set cash payout, depending on your injury, you can deal with those pesky out-of-pocket expenses a little better.
A snapshot of Australian injuries in Financial Year 2020
enough to require a
(up by 18%)
fracture, followed by soft
otherwise stated refer to
Financial Year 2019-2020