There’s a familiar narrative you’ll hear as you get older: healthcare doesn’t get any cheaper.
While health insurance can help you save you money, if you don’t have an up to date policy or a policy that really suits your needs, it can also quickly become unaffordable.
So, what should you look out for when it comes to health insurance in your 50s, and is it affordable?
Every one of us has a different background and family history, which means we’re all susceptible to different conditions.
However, there are some trends. For example, large numbers of ageing Aussies are particularly susceptible to teeth decay and vision impairments. You will also have to look out for issues with joints, chronic illnesses, and more – all of which can be expensive to treat.
Based on your family history and your current health status, you probably already know what to look out for; including things like diabetes, prostate cancer or breast cancer and high blood pressure.
Private health insurance is an investment, one that truly pays off when you need it most. Indeed, older Australians tend to use their health insurance more often than younger generations, which is consistently shown in the Australian Prudential Regulatory Authority’s (APRA) statistics.
Some operations can cost tens of thousands of dollars. When paying for these using a private hospital insurance policy, excesses and out of pocket expenses pale in comparison to the high cost of treatment paid for outright.
While you can simply seek out treatment as a public patient, you won’t have as much control over your healthcare. For example, a private hospital policy:
An extras policy, on the other hand, covers treatment outside of a hospital, which you aren’t able to claim on Medicare anyway. Depending on your level of cover, extras can reduce your medical expenses for a range of treatments:
For surgeries where you are treated as a private patient in a private hospital, Medicare covers 75% of the Medicare Benefits Schedule (MBS) cost, which is a price for various medical treatments the Government considers adequate for providing the service.
Typically, your health insurance covers the remaining 25% of the MBS for treatment and services that are included on your policy, but doctors, surgeons and other health professionals can choose to charge more for their services. This then leaves patients with an out of pocket cost, which is also known as a gap payment.
The cost of medical treatments varies based on what procedure you’re having done and who’s performing the operation. Let’s take a look at a couple different treatments as examples, such as a single hip replacement, colonoscopy and gall bladder removal.
|Treatment||Benefits typically paid by Medicare (75% of MBS)||Typical amount paid by insurer||Typical doctors’ fees||Average out of pocket expense paid by patients*|
|Gall bladder surgery||$1,200||$1,100||$2,700||$350|
|Hip replacement (single)||$1,900||$1,900||$5,000||$590|
|*This figure is calculated after Medicare and private health insurance payouts were received and doesn’t include any costs charged by the hospital.|
Source: Medical Costs Finder, Department of Health, Australian Government. 2022.