Oops, sorry I wrote the comment when I woke up in the middle of the night.
Ok, Medicare in Australia is a funded by an income tax levy that every Australian pays, set at 1.5%. It's an almost paltry sum of money when you consider it's free healthcare.
My private health insurance also receives a rebate from the Australian Government. From what little I understand about the system, the Australian Government funds this out of my Medicare levy I pay, so that I'm not paying twice.
We also have plenty of other medical programs running in Australia - like the Pharmaceutical Benefits Scheme which helps low income people afford the medications they require. I'm not up on the numbers, but I think it caps the costs of certain medications at about $5
It works well, I don't know too many people that complain about our system at all. The cost of health care certainly isn't an issue at all that weighs on too many peoples minds