Health Insurance Available for the Older Australians

Are you thinking about purchasing private health insurance? There are many types of health insurance policies that are suitable for older Australians, but when considering cover it is important to think about your own individual needs and the type of cover you might require. We explain private health insurance, including the tiers, benefits, and costs, to help you make an informed decision.

What is Private Health Insurance?

Private health insurance is insurance for medical care that is not covered by the public system. Medicare is the public health system in Australia, which gives all Australians access to free healthcare such as visits to the GP and care in public hospitals. While the public system does cover a lot of medical needs, there are many reasons why taking out private health insurance is a good idea. It gives you an additional safety net to access healthcare quickly and by the doctor of your choice, and it covers you for additional care that the public system doesn’t offer.

There are two types of health insurance: hospitals and extras cover. Hospital cover includes any procedures or treatment you receive as a patient in a hospital, such as surgery or emergency care. Extras cover is for additional medical treatment that does not take place in a hospital. This includes specialists such as optometrists, physiotherapists, dentists and more. Also, it can cover medical aids like prescriptions glasses, hearing aids and asthma pumps. It can even cover travel and accommodation if you are unable to access certain types of essential medical treatment where you live.

Benefits of Private Health Insurance 

There are a few reasons why it’s a good idea for older Australians to purchase health insurance. Aside from the ability to be treated as a private patient in a hospital, health insurance offers a range of benefits.

More Choice in Doctors, Hospitals and Care

When you have a private health insurance policy, you’re able to choose the medical professionals that you work with for certain types of procedures and treatments. While in the public system you will have whatever doctor is available at the time, people with private health cover can choose their doctor. Additionally, they can be treated in a range of private hospitals. 

Shorter Waiting Times

For certain procedures, especially non-urgent surgeries, the waiting times within the public system can be long. This can be particularly important for older Australians, who may need to have procedures more often. For example, data from the Australian Institute of Health and Welfare shows that the wait time for a total hip replacement was 100 days in 2016. And for total knee replacements, the time was more than 200 days. These long waits can be very problematic if you’re living in pain or if you have lost mobility and independence. When you have private health insurance, you can access these sorts of procedures far more quickly. 

Save Money on Tax

People who don’t have private health insurance can be charged a Medicare levy surcharge. This is a levy of 1.5 percent of taxable income, applicable to people who don’t have health cover and earn income over a certain level. Taking out a private health insurance policy with hospital cover can allow you to avoid this surcharge.

Additionally, you may be entitled to a private health insurance rebate from the government. This is for people who have health insurance and have an income below a certain limit. You receive the rebate as a lower insurance premium, or an offset in your annual tax return. For older Australians who are no longer earning a salary or have cut back their work hours, this could be especially beneficial.

Health Insurance Available in Australia: The Four Tiers of Health Insurance

Health insurance is broken into four tiered categories: basic, bronze, silver and gold. For hospital cover, these are standardized by the Australian Government, which means that the services you receive on a certain tier won’t differ between insurers. For extras cover, different insurance providers will offer different services and aids. These are not government mandated.

Although there are only four tiers, you will find many more policy options offered by insurance providers. This is because they combine hospital and extras cover in different ways to create various policies: for example, you may be able to purchase silver level hospital cover, with bronze level extras. 

Basic

Basic is the lowest level of cover and is recommended for people hoping to purchase health insurance without spending too much. Basic cover helps you to avoid the Medicare levy surcharge and protects you against unexpected medical costs. Some of the things that are included in basic hospital cover include rehabilitation and palliative care.

Bronze

Bronze cover offers more cover for those who want the option to access additional hospital care. As well as everything included in Basic cover, Bronze offers medical care relating to the brain and nervous system, bone, joint and muscle, joint reconstructions, and many more. 

Silver

Silver offers cover for a wide range of treatments. It provides peace of mind for older Australians who may need medical care for their back, neck and spine, as well as cover for heart and vascular conditions. Some of the other treatments included in silver cover are implantation of hearing devices, treatment for lung and chest conditions, and dental surgery.

Gold

Gold is the highest level of hospital cover and provides premium care for older Australians. If you have complicated health needs or chronic illnesses, you may want to consider Gold to ensure you are covered no matter what. Some of the treatments included in Gold policies include joint replacements, dialysis for chronic kidney failure, pain management and insulin pumps. 

Is Private Health Insurance Worth It for Older Australians?

Although health insurance does offer benefits, deciding whether or not to purchase health insurance or keep an existing policy is a personal decision. Some older Australians decide not to continue paying for health cover when they are no longer working and no longer benefitting from the tax saving. 

Health insurance, particularly gold and silver cover, can be expensive. When you are using retirement savings or living on a pension, this can sometimes make private health cover unaffordable. Basics cover is cheaper, but often does not include the types of care older people are most likely to need.

Additionally, private health insurance does not guarantee you access to a private hospital. Private hospitals can choose whether or not to admit any patients and may choose not to treat seniors with very complex needs. 

You do not need private health cover to access high quality healthcare. The doctors working in the public health system are highly trained and excellent at their jobs. Therefore, the decision on whether private health insurance is worth it may depend on your financial situation and on how quickly you want to access some treatments and procedures.

How Much Can Health Insurance for Seniors Cost?

The price of health insurance can vary significantly based on your type of policy, provider, and other factors. As discussed, a Basics hospital cover option with limited extras could cost approximately $20 dollars per week, while a Gold level policy with all the possible extras can be up to $100 per week. 

It can also depend on where you live. The average cost of private health insurance differs around Australia, with seniors living in the Northern Territory and Western Australia having lower average annual health insurance premiums, and older Victorians and Queenslanders having the highest in the country (according to Canstar in 2020). 

How Can You Choose the Right Health Insurance Policy?

When purchasing a private health insurance policy, it’s a good idea to shop around and consider a few different providers before making a decision. Health insurance comparison tools can help you to find the best value cover that meets your needs. When comparing policies, consider the following factors to help determine the best policy for you:

Your Health

Older people with a range of health problems will almost always want comprehensive cover. If you have any medical conditions, choose a policy that will provide for these. Make sure to check the policy for any exclusions as well, as some won’t cover you if the condition was pre-existing.

Your Family History

Some health conditions are genetic. If you have a history of a certain illness in your family, you may want to take out a policy that offers good cover for this condition.

Your Additional Medical Needs

Extras policies offer cover for things like dental, optical, podiatry, health aids and more. If you wear glasses, use a hearing aid, or require work on your teeth, make sure you choose a policy with extras cover that will cater for your needs.

Your Budget

Although having a high level of private health cover is good for peace of mind, this won’t be achieved if you’re stressed about money. Always choose a policy that fits into your budget and remember that the public health system is there to support you if you are not covered for a specific kind of care. Sometimes it can be cheaper to pay for certain things – like prescription glasses – out of pocket instead of paying monthly for a policy.

Other Things to Know About Health Insurance

Hospital vs. Extras Cover

Most people will choose to take out a policy that includes both hospital and extras cover. This is particularly recommended for older Australians, who have varied health needs and will probably use both the care granted by hospital cover and some of the extras available. Hospital cover is more expensive than extras cover but is ultimately the more valuable if you require surgery or another procedure. 

Waiting Periods

If you are thinking about purchasing a health insurance policy, it’s important to be aware of any waiting periods. Private health insurance waiting periods are the amount of time that you need to have a policy before you can claim for certain costs. These wait times are set by individual insurers, and it’s easy to get caught out with no cover if you’re not aware of them.

For example, you may think that you can buy a policy and immediately book in for a procedure. However, the waiting period could be up to a year before this specific cost is covered. Always check carefully before committing to a policy, and if you think you will need a certain type of care later on, plan ahead and purchase cover early.

Seniors Policies

Some health insurance providers will offer specific policies designed for seniors. The definition of seniors may differ between providers, but it normally means someone over 60. Seniors policies are created with older Australians in mind, catering for the age-related conditions and illness that are more likely to affect seniors. They will also exclude things that older people are unlikely to use, like health cover for pregnancy.

Even though the number and variety of health insurance policies may seem confusing, it is possible to find a policy that works for you. Always compare policies, think about the level of cover you need, and remember that while it may be beneficial, it’s not compulsory for older Australians.