Save on healthcare

Seven ways to make sure you don't pay more than you have to
 
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  • Updated:3 Aug 2006
 

01 .Introduction

It’s bad enough having a condition that requires you to use the healthcare system, without feeling the pain in your wallet too. Here are seven ways to save yourself some cash, and make the health system (and your tax contributions) work for you:

See our latest health insurance comparison article . Looking to protect your personal cashflow? View our income protection insurance article for more information.

Please note: this information was current as of August 2006 but is still a useful guide to today's market.

 
 

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02.Medicare safety net

 

The Medicare Safety Net aims to protect people against high out-of-pocket medical costs incurred outside hospital.

  • It includes the costs of going to your GP, as well as a range of treatments out of hospital, including consultations with specialists, blood tests, x-rays and scans.
  • It doesn’t include services that aren’t covered by Medicare, such as dental and physiotherapy (except in special cases — see Enhanced primary care for details).

Medical costs

There are three factors that determine what you end up paying:

  • The Medicare benefit, which is the rebate you receive from the government for the medical service you’ve paid for. If a doctor bulk-bills, you won’t pay anything at all because the doctor bills Medicare directly and accepts the rebate as full payment for providing the service. (See Bulk-billing doctors  for more on this).
  • The Medicare Benefits Schedule fee, which is the cost the government attributes to the service, and which is often higher than the Medicare benefit allocated for it. In this case if a doctor charges you this amount you’ll have some out-of-pocket costs.
  • The doctor's fee — what the doctor actually charges you — which might be higher again than the schedule fee.

Medicare safety net thresholds

Essentially, the Medicare Safety Net works by reducing your out-of-pocket costs once you reach either of the following two thresholds:

General threshold

  • This is $1000 per calendar year for Medicare cardholders; if you’re a Commonwealth Concession Card holder or a member of a family that receives Family Tax Benefit (A), it’s $500.
  • It’s reached by adding up all your out-of-pocket medical costs — that is, the difference between the doctor's fee and what the Medicare benefit covers. For example, the Medicare benefit for an initial, referred consultation with a specialist is $62.95, so if the specialist charges you $120 your out-of-pocket costs will be $57.05.
  • Once you reach the general threshold, the Medicare benefit is an additional 80% of your out-of-pocket costs. So, post-threshold, this same consultation would end up costing you just $11.40.

Gap threshold

  • This threshold is $345.50 per calendar year for all Medicare cardholders.
  • The difference between the schedule fee and the Medicare benefit for a service is called the ‘gap’ amount, and you build up towards the gap threshold every time the schedule fee is higher than the Medicare benefit for the service.
  • Using the same example as above, the schedule fee for this specialist consultation is $74.05, of which the Medicare benefit covers $62.95, leaving a gap of $11.10 that you have to pay. Once you qualify for the gap threshold, you’ll receive 100% of the schedule fee for all services, so this gap no longer exists.

Safety net family

  • If you belong to a ‘safety net family’ (a married or de facto couple, with or without dependent children, or a single person with dependent children) you can combine medical costs so that you’re likely to reach the thresholds sooner. But you’ll need to actively register as a family for the safety net, even if all your family members are listed on your Medicare card.
  • Individuals are automatically registered for the safety net, and your out-of-pocket costs will automatically be reduced when you reach it; you just need to keep your contact details up-to-date with Medicare and to sign and return the form you’ll be sent when a threshold is reached, before any benefits can be paid.

To register as a safety net family

  • Call Medicare on 132 011
  • Pick up a registration form from your local Medicare office
  • Download or fill in the online form at www.medicareaustralia.gov.au



Bulk-billing is the term used when the medical practitioner bills Medicare directly, accepting the Medicare benefit as full payment for a service. If your practitioner bulk-bills, your appointment won’t cost you anything and you’ll be saved the hassle of claiming back benefits.

What and who gets bulk-billed?

Along with GP attendances, optometry and pathology are the Medicare services where you’re most likely to benefit from bulk-billing. The bulk-billing rates of specialist services, on the other hand, are comparatively low.

Medicare offers GPs financial incentives to bulk bill:

  • Children under 16 – $5.15 extra from Medicare every time they bulk bill.
  • Commonwealth Concession Card holders – $5.15 extra.
  • People living in country areas and Tasmania – $7.85 extra.

So if you fit into any of these categories, you’re more likely to be bulk-billed.
If your doctor charges privately you’ll need to pay their fee up front, and claim the rebate (currently $31.45) for a standard consultation lasting less than 20 minutes) back from Medicare. And if your doctor doesn’t bulk-bill you, chances are they’re charging above the schedule fee and you’ll be out of pocket.

Finding a bulk-billing GP

  • Unfortunately it’s not possible to get a list of all the bulk-billing GPs in your area. The only way to find out is to ring or drop in to the practice and ask.
  • If you're financially constrained, let your doctor know. GPs that charge private fees may at their own discretion choose to bulk bill some patients according to their individual circumstances.

Scans and X-rays

If you’re having an x-ray, ultrasound or some other kind of diagnostic imaging outside hospital, you’ll only receive Medicare benefits if it’s done at a site that has practice registration.

Registered diagnostic imaging and radiation oncology practice sites have a location-specific practice number (LSPN) that needs to be quoted on patient accounts/receipts for you to receive a Medicare benefit for these services. More likely than not, your doctor will refer you to a registered practice, but it’s worth checking.

To find your nearest registered practice location

04.Different types of hospital care

 

Be a public patient in a public hospital

Even if you have private insurance, you’re under no obligation to be a private patient in a public hospital. But you can revert to private any time you like.
As a public patient in a public hospital you get the following services free of charge:

  • Accommodation in the hospital.
  • Nursing care
  • The procedures and treatment you were admitted for, performed by the doctor allocated to you.
  • Medicines prescribed for you.
  • Diagnostic tests needed to support your treatment.
  • Treatment or services for your condition from hospital social workers, occupational therapists, physiotherapists, dietitians and other hospital health workers.
  • Follow-up treatment as a hospital outpatient or in the community.

A private patient in a public hospital

  • If you choose to be a private patient in a public hospital, the same services are available but have to be paid for by you or your private health fund.
  • The only benefit is you can ask to see a medical specialist of your choice from among those appointed to the hospital. (Although even as a public patient you’re entitled to a second opinion free of charge.)
  • Being a private patient doesn’t mean you’ll get a private room, as these are given on the basis of clinical need in public hospitals. And it shouldn’t make any difference to the time you’ll wait for a service, or the quality of the service you’ll receive.

A private patient in a private hospital

  • The main advantage of going private is being able to reduce your waiting time for elective surgery by having it done at a private hospital.


If your out-of-pocket medical expenses are over a specified limit — currently $1500 — within a financial year, you’re eligible for a tax offset.

To claim the medical expenses rebate in your tax return you’ll need to:

  • Calculate the total medical expenses you incurred for yourself and your dependants.
  • From this total figure deduct any refunds from Medicare, your health fund or any other reimbursements that relate to those expenses received during the financial year, to determine your out-of-pocket expenses.
  • You can then claim an offset of 20% of these expenses over the $1500 threshold.
  • You’ll need to keep all receipts, along with your Medicare financial tax statement, to prove your claim if the tax office asks you.

For more information
Call the ATO on 132 861 and follow the prompts.
Go to the ‘Individuals’ section of the Australian Taxation Office (ATO) website www.ato.gov.au. Click on ‘What you can claim’, ‘Tax offsets (rebates)’ and then ‘Medical expenses’.

06.Enhanced primary care

 
  • If you’ve got a chronic medical condition (e.g. diabetes) or have complex care needs (e.g. as a result of HIV-related illnesses) you can get additional Medicare benefits for some services provided to you by allied health professionals (such as physiotherapists, psychologists and speech pathologists) and dentists, so long as you're being managed by your GP under something known as an Enhanced Primary Care (EPC) plan.
  • Any out-of-pocket expenses for patients being managed under an EPC can contribute towards the Medicare Safety Net thresholds.

What's an EPC plan?

It's a fairly complicated arrangement where your GP needs to:

  • Prepare for you a GP management plan — a comprehensive plan for the management of your condition
  • Co-ordinate your team care arrangements, which are the treatment and services provided by at least three different providers. The team for someone with type 2 diabetes, for example, might include their GP, a dietitian and a podiatrist.

How to apply for EPC benefits

  • The need for allied health or dental services must be identified in your EPC plan, and Medicare rebates are available for a maximum of five allied health and three dental care services per patient in a calendar year.
  • Your GP needs to refer you for these services (using an EPC program referral form), and can only refer you if the service relates to the condition for which the EPC plan was formed.
  • It’s not mandatory for GPs to manage eligible patients under an EPC plan, so if you’re not being and think you should be, try discussing it with your GP. Not only will an EPC plan give you access to additional Medicare benefits, it will also help ensure good quality of care and regular assessments.

07.Cutting medication costs

 

These are our top tips for cutting your medication costs.

Generic medicines

  • Buy generic medicines. They have the same active ingredients as the originally developed brand-name version but are usually cheaper.
  • If it’s a prescription medicine you can ask your doctor to prescribe a less expensive brand, or ask your pharmacist if they can give you a cheaper equivalent (so long as the doctor hasn’t ticked the box marked ‘brand substitution not permitted’ on the prescription).

PBS safety net

If you spend over a certain amount on PBS medicine (prescription drugs covered by the government-subsidised Pharmaceutical Benefits Scheme) within one calendar year, you can get the rest of the year’s medication cheaper or free. Here’s an overview:

  • If you and your family are general patients (Medicare card holders) and you spend more than $960.10 on PBS drugs in a calendar year, your subsequent PBS medications will cost $4.70 each.
  • Concessional patients and their families (those with a Centrelink or DVA concession card) paying $4.70 per script can get free PBS medicine that year once they’ve spent over $253.80.
  • If you think you’re likely to qualify, ask your pharmacist for a Prescription Record Form (PRF), on which they’ll record each PBS medication purchase. (The amount you need to spend equates to about a prescription a week, so not many people will qualify.)
  • Once you’ve reached the threshold, ask your pharmacist for a Safety Net card to get your discounted or free PBS medicine.

Details you need to know

  • You’re responsible for checking that information is recorded correctly, telling the pharmacist when you reach the threshold and storing the PRF (though if you use only one pharmacy, ask them to keep it there). If you use more than one pharmacy, this can be difficult to monitor, especially for people with cognitive difficulties.
  • Pharmacists can charge a ‘recording fee’ of 97 cents or sometimes $1.38.
  • If you get a more expensive version of the drug, the ‘brand premium’ or ‘therapeutic group premium’ — the difference in cost between it and a cheaper generic version — isn’t covered by the Safety Net. And if you’re prescribed a drug the manufacturer refuses to supply at the government’s PBS price, you have to pay the difference. Known as a ‘special patient contribution’, this difference also isn’t counted towards the Safety Net threshold.
  • To avoid paying extra, ask your doctor not to tick the ‘brand substitution not permitted’ box on your prescription, so the pharmacist can give you the generic version if there’s one available.
  • There’s the 20-day rule — if you need a repeat supply of some PBS drugs within 20 days, it can’t be counted towards the Safety Net threshold. Another detail you need to know if you think you’re eligible for the Safety net.