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What Australia can teach America about health care

Donna Gilbert by Donna Gilbert
June 20, 2025
in Care Services, Services
0
Health Care Price Transparency: Fool’s Gold, or Real Money in Your Pocket?

When I look at the Australian healthcare system, I see something unusual: a hybrid of where the United States is now and where Bernie Sanders wants to take us.

Australians have a universal coverage scheme that leans more heavily on private insurance than most other systems we discuss. The country provides a base of public insurance to all citizens but then actively encourages them to take out private plans to supplement their government-run insurance.

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The Australian healthcare system generally gets pretty good marks! You can see that in the most recent Commonwealth Fund rankings of international healthcare systems. Australia came in second out of the 11 countries included. (The United States, unsurprisingly, came in last.)

Commonwealth Fund
In Australia, all citizens get coverage from a public health insurance plan that covers hospital stays, doctor visits, and prescription drugs. Accessing the health care system with public insurance is low: There are no copayments or deductibles for publicly financed hospital visits.

Along with providing public coverage, Australia also encourages residents to enroll in private plans. A relatively new initiative called Lifetime Health Cover encourages Australians to sign up for private insurance when they’re young — or face higher premiums when they get older (when they’ll likely have greater health care needs). Australians who don’t take out a policy before age 31 could face a 2 percent premium surcharge for each year they go uncovered. In other words, someone who waits until they turn 40 to enroll in private coverage would be paying 20 percent more than someone who signed up 10 years earlier.

For lower-income Australians, there are public subsidies to lower the price of the public plans, which can range from a few hundred dollars to a few thousand depending on the size of the benefits package and whom it covers.

The private coverage Australians buy can cover additional benefits not included in the public package and offer faster access to services in the public program. There is evidence that Australians use private plans to access knee replacements faster, as in other surgical procedures. Websites for new Australian moms advise that people with private coverage are more likely to get a private room for their postpartum hospital stay than those with the public plan and can choose a doctor.

When I look at Australia’s health care system, I see one that offers all citizens a basic package of benefits. That’s different from the United States, where, even after the Affordable Care Act, 27 million Americans still lack coverage. Only 14 percent of Australians say they’ve experienced a cost-related barrier to receiving care in the past year. That’s pretty much on par with Canada (where the figure stands at 16 percent) and much lower than the United States (we’re at 22 percent).

At the same time, the Australian system seems to retain one of the defining features of the American healthcare system: the ability to purchase quicker access to coverage. This means there are some disparities in healthcare access between private and public coverage. A recent report from the Australian government shows longer wait times for those who use public plans.

Sydney Morning Herald
This chart will read differently depending on what you want from a healthcare system. If you think everyone should have equal access to health care, regardless of income, then you’ll see a lot of problems in this chart. It shows that there are disparities between those who carry public coverage and those with private benefits in Australia.

But if you think that as long as everyone has basic coverage, it’s okay for those who can afford it to purchase extras, then you might be more okay with Australia’s results.

Looking back at the chart I shared earlier of the Commonwealth Fund’s international health rankings, you’ll see that while Australia gets high marks for its healthcare system overall, it is further down the list when ranked on equity alone.

In the United States, we’ve become quite accustomed to the idea that having greater wealth means easier access to health benefits. That’s why when I look at the Australian system, I see one that might be a more realistic path forward for us today—one that, for better or worse, retains certain parts of the American healthcare system while adding a basic level of coverage for everybody.

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