For seniors who regularly require healthcare treatment, private health insurance may be the only practical option. Medicare offers a basic level of cover but often can’t provide timely or affordable relief from some of the common conditions from which seniors suffer.

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What can I expect from public senior care?

Seniors visit the doctor more than any other age group, so it’s imperative that they know what’s covered by Medicare and what isn’t. Here’s a breakdown of what you can expect from Medicare and the private healthcare market (example of hospital and extras cover).

Medicare & Private Health Coverage

 

Medicare & Private Health Coverage

 

Pharmaceutical Benefits

Seniors also make up the majority of pharmaceutical recipients in Australia. Thanks to the Pharmaceutical Benefits Scheme (PBS), Medicare card holders pay a fraction of their drug cost at the pharmacy (for certain medications only).

The amount you’ll have to pay depends on the medicine you’re buying, but all Medicare recipients are entitled to the PBS benefit. To check whether your medication is listed under Medicare’s subsidised items, click here.

Elders who make less than $51,500 as an individual or $82,400 as a couple are also entitled to the Commonwealth Seniors Health Card.

If you’re above the Age Pension age, making less than the previously mentioned amount, and do not receive a pension from the Department of Veterans’ Affairs, you’re eligible for this card.

Having a Commonwealth Seniors Health Card reduces the amount you pay at the pharmacy even further.

Where Medicare May Not Suffice For Seniors

As a person ages, his or her risk of hospitalisation increases. Medicare covers the basics but sometimes fails to provide timely and affordable accommodations seniors may need when they visit the hospital.

If you rely on the Medicare system, regular visits to the doctor can be a chore. And if you need hospitalisation, you can’t elect to have a private room and will not be able to be your own surgeon or specialist.

The most glaring shortfall in the Medicare system is how they treat “elective” surgeries. Some seniors experience a rapid deterioration of their body when they get older, which often requires surgery to fix.

If they don’t receive timely surgery, it means living in discomfort and pain. Medicare might cover the procedure you need, but you may need to wait months or even years on a public hospital waiting list until you can start recovery.

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What are the most common health problems that seniors face?

As we get older, we start to feel the miles we put on our body. Pain begins to flare-up and sometimes diseases take hold. The following conditions commonly develop in older age. In some cases, private health insurance may be the only option if you’re after cover for treatment related to:

Heart Attack/Heart Disease

Heart disease and stroke combine to be the leading killers in the world. As we age, we become more susceptible to heart problems that put us at elevated risk of hospitalisation or death.

Avoiding some elements of cardiovascular disease through lifestyle changes is possible. Still, a large percentage of heart disease predisposition depends on your genetics and family history.

Medicare and the cheaper insurance plans may not cover you for all cardiac procedures in private hospitals, meaning you’ll have to pay out-of-pocket or potentially join a public hospital waiting list.

The same is true for rehabilitation. Mid-tier to upper-tier plans are often the only option if you’re worried about the coverage of heart procedures.

Arthritis

Arthritis is another sign of ageing that’s mostly caused by genetics. Osteoarthritis and rheumatoid arthritis occur when your immune system attacks your joints, causing inflammation and pain.

It’s incredibly painful to live with arthritis on a daily basis, and you’ll likely require frequent treatments and therapies to combat your symptoms. In extreme cases, you may even need to undergo joint replacement surgery.

Since Medicare considers many of these replacements to be “elective,” there may be a long waiting list until you receive care in a public hospital.

A higher-tier plan will usually cover these expenses in a private hospital, while low and mid-tier plans may cover only some of the treatments associated with arthritis.

Osteoporosis

Our bones start to deteriorate and lose density as our bodies age. Bones become more brittle, and some seniors develop osteoporosis as a result.

Women are particularly susceptible to osteoporosis due to their hormonal changes as they experience menopause. Their bones aren’t as dense as men’s in the first place, which means they require more calcium and vitamin D to prevent potential osteoporosis.

It’s difficult to test for osteoporosis, though the Australian medical community is making prevention a priority. Most of the time, a fracture is the first sign you have the condition.

Treatment and rehabilitation for osteoporosis can be costly. Medicare covers some therapies, but not all of them.

Some of these treatment and rehabilitation services are essential for anyone living with osteoporosis, and sometimes one of the biggest barriers to appropriate care is the cost. When picking a plan, make sure you’re choosing one that will reimburse your expenses for treatment associated with this condition.

Eye Conditions

Our eyes start to deteriorate as we age, and some experience conditions like cataracts, glaucoma, and Macular Degeneration.

Medicare covers eye tests and any public hospital treatment required for these conditions, however you may need to wait months or years for public hospital treatment. Make sure your hospital cover includes these services to ensure timely and affordable treatment.

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How do I lower the cost of health cover?

There are a few financial incentives in place to lighten the load on the Medicare system. Simply put, these incentives reward those who choose private health cover over Medicare alone.

For example, by purchasing private cover when you’re younger, you can avoid paying higher health insurance premiums as you age.

Here are some of the incentives Australia has in place, as well as how they affect your health care spending when you get older.

Lifetime Health Cover

This is one of the ways the government incentivises people to take out cover earlier on in their lives.

Once you hit 30, the clock starts ticking. After that, private insurers will add a 2% loading on top of your premium for each year you’re uninsured up to a maximum loading of 70%.

If you don’t buy private hospital cover until you’re 40, for instance, you’ll pay a 20% loading for 10 consecutive years.

Having gaps in your coverage matter as well. Once you establish your hospital cover, you have 1,094 days available for gaps in coverage without affecting your Lifetime Health Cover loading.

While this might seem like a long time, keep in mind that the 1,094 is throughout the lifetime of your coverage. Limit the amount of time you’re without cover to help reduce the chances of paying the added 2%+ loading.

Medicare Levy Surcharge (MLS)

The Medicare Levy Surcharge is another way the government incentivises buying private health cover. The government designed the MLS to ease the burden on the Medicare system.

MLS is an additional tax payable by higher income earners who choose not to take out private health insurance. The amount you’ll have to pay is dependent upon your income level. The threshold begins at incomes of $90,000 for individuals and $180,000 for families.

If you earn less than the above amounts, you don’t have to worry about paying the MLS. Likewise, if your family income exceeds $180,000, but your personal income is less than $21,655, you won’t have to pay the surcharge.

Medicare Levy Surcharge Calculator

The Medicare Levy surcharge is an additional fee paid on top of the 2% Medicare Levy Surcharge that most Australian taxpayers pay. You can avoid the surcharge if you have Private Health Insurance (Hospital Cover).

The exact surcharge level you'll need to pay depends on your income level and relationship/family status. Use the slider and dropdown menu below to determine what surcharge you're liable for if you don't have private hospital cover.

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Step 1: Select Your Annual Income $

Step 2: Select Your Life Stage Status Single Family Single Parent Family Couple

Calculate

Your Medicare Levy Surcharge is 0.00% of your income, or $0.00

Singles	≤ $90,000	$90,001 - 105,000	$105,001 - 140,000	≥ $140,001
Families	≤ $180,000	$180,001 - 210,000	$210,001 - 280,000	≥ $280,001
Medicare Levy Surcharge
	Standard	Tier 1	Tier 2	Tier 3
All Ages	0.0%	1.0%	1.25%	1.5%

Tax Rebate

The third incentive for purchasing private health cover comes in the form of a government tax rebate that will will depend on your age and income.

Seniors with low income particularly benefit from these tax rebates, making private health cover more accessible to those who need it most.