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).
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:
- 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.
- 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