US President Donald Trump made the comment to Prime Minister Malcolm Turnbull in New York at an event to mark the 75th anniversary of the Australian and US victory in the Battle of the Coral Sea.
He was asked about the House of Representatives passage of a bill to roll back his predecessor Barack Obama’s signature Affordable Health Act.
The American Medical Association has warned millions of Americans stand to lose health insurance coverage under the changes.
But President Trump said it would mean premiums and deductions would drop, and vowed to "finish (Obamacare) off".
“We have a failing health care - I shouldn’t say this to our great gentleman, my friend from Australia,” he said, turning to Mr Turnbull.
“You have better health care than we do.
“But we’re going to have great health care very soon.”
Trump on Australian health care
Vermont senator Bernie Sanders jumped on the comment, vowing to remind him of it when the bill makes its way to the Senate.
“The president has just said it,” he told MSNBC.
“Take a look at the Australian health care system.
“Let us move to a Medicare for all system that does what every other major country on earth does - guarantee health care to all people at a fraction of the cost per capita what we spend."
