Although it is now more than ten years since Medicare was introduced, Medicare is still a relevant response to ensuring access to health care. However, marginal improvements to Medicare are needed in three areas. First, in terms of bureaucratic issues, rational development of health policy suffers from problems associated with the contemporary division of Commonwealth and State responsibilities. Secondly, more sophisticated methods for priority-setting, which take account of both the technical and allocative efficiency issues, are needed. Finally, Medicare needs to be enhanced by improving its ability to meet the diverse and varying needs of patients with long-term illnesses: improvement in 'coordinated care' is necessary. Approaches to meeting these needs are canvassed.