Feeling the pain in your wallet?
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 six ways to save yourself some cash, and make the health system (and your tax contributions) work for you:
There are a number of changes proposed in the 2014 Budget that will make it harder to use these savings, but it’s worth noting that none of these changes have yet gone through both Houses of Parliament and there is a lot of opposition to them. How these changes might affect you include:
The Medicare Safety Net aims to protect people against high out-of-pocket medical costs incurred outside of 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.
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.
- 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.
- Medicare will reimburse 100% of the Medicare Benefits Schedule (MBS) fee for a general practitioner and 85% of the MBS fee for a specialist.
- If you are a private patient in a public or private hospital Medicare will reimburse 75% of the Medicare Schedule fee for services and procedures (does not include hospital accommodation and items such as theatre fees and medicines).
- The doctor's fee — what the doctor actually charges you — which might be higher again than the schedule fee.
Budget 2014 – proposed changes
From 1 July 2014 you may pay more if you visit a specialist, allied health professional, nurse practitioner, midwife or dental surgeon.
Indexation of all Medicare Benefits Schedule fees was suspended on 1 November 2013 until July 2014. This suspension has now been extended by two years.
- The suspension excludes GP visits and bulk-billing incentives paid to GPs.
- Indexation of the fees in the Department of Veterans’ Affairs (DVA) Schedule of Benefits will also be suspended from 1 July 2014 for 24 months.
- These changes will not affect the fees for pathology and diagnostic imaging services which are not indexed annually.
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 $430.90 per calendar year for Medicare cardholders.
- It’s reached by adding up the difference between the Medicare scheduled fee and what the Medicare benefit covers.
- Once the threshold is reached, Medicare will pay 100% of the scheduled fee for each service you use.
Extended general threshold
- The extended general threshold is $624.10 per calendar year per family if you’re a Commonwealth Concession Card holder or a member of a family that receives Family Tax Benefit (A).
- For other Medicare card holders the threshold is $1,248.70 in 2014 and $2,000 from 1 January 2015.
- It’s calculated on the difference between whatever Medicare rebate you receive and the total cost of the consultation.
- Once you have reached the threshold you receive an additional Medicare benefit of 80% of your out-of-pocket costs.
Budget 2014 – proposed changes
From 1 January 2016 a Single Medicare Safety Net (SMSN) for out-of-hospital services will replace the Extended Medicare Safety Net (EMSN), the Original Medicare Safety Net (OMSN) and the Greatest Permissible Gap (GPG). The thresholds are:
- $400 – for singles with a concession card or families with a concession card.
- $700 – for singles with no concession card or families receiving Family Tax Benefits Part A with no concession card.
- $1000 – for families with no concession card.
- · From 1 January 2017 the thresholds will be increased each year in line with inflation.
There will be new limits:
- on the out-of pocket costs for each service that can accumulate towards the safety net threshold,
- once you have reached the threshold, you’ll receive 80% of your out-of-pocket expenses up to a cap of 150% of the Medicare Schedule fee.
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, or pick up a registration form from your local Centrelink or Medicare office, or download or fill in the online form at humanservices.gov.au/customer/forms/sn1
Bulk-billing is the term used when the medical practitioner bills Medicare directly, accepting the Medicare benefit as full payment for a service. Up till now, if your practitioner bulk-bills, your appointment won’t cost you anything and you’ll be saved the hassle of claiming back benefits.
2014 Budget – proposed changes:
From 1 July 2015
- $7 co-payment for GP visits, out-of-hospital pathology, and x-rays that are bulk-billed.
- There is a cap of a maximum of 10 patient contributions per calendar year across these services for concession card holders and children under 16.
- The states have the green light to charge $7 co-payment for visits to emergency departments – none of the states have yet proposed this.
- Medicare rebates for these services will be reduced by $5, so if you aren’t currently bulk-billed you won’t pay a co-payment but will receive $5 less back from Medicare.
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.
If your doctor charges privately you’ll need to pay their fee upfront and claim the rebate 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 them 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.
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.
Different types of hospital care
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, and
- 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, you may be eligible for a tax offset (depending on your income). The tax offset has been phased out since 1 July 2013, however:
- if you received the offset in 2012–13 you will continue to be eligible for the offset for 2013–14 if you have expenses above the relevant claim threshold,
- if you receive the tax offset in 2013–14, you will continue to be eligible for the offset in 2014–15,
- the offset will continue to be available for taxpayers with out-of-pocket medical expenses relating to disability aids, attendant care or aged care expenses until 1 July 2019.
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 10% of these expenses over the $5000 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
Contact the ATO www.ato.gov.au, phone 132 861
These are our top tips for cutting your medication costs.
- Buy generic medicines. They have the same active ingredients as the originally developed brand-name version, but are usually cheaper. Check first with your doctor or pharmacist to make sure there are no other factors that might impact their effectiveness.
- 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).
- Shop around and ask your pharmacist to price match.
Budget 2014 – proposed changes
From 1 January 2015, you’ll pay an additional contribution for PBS subsidised prescriptions.
- $0.80 for concession card holders – a maximum of $6.90 instead of $6.10.
- $5.00 for general patients - $42.70 instead of $37.70.
- These surcharges only apply for medicines that cost more than the co-payment, for example a medicine that cost $20 will still cost $20 for a general patient, not $5 more.
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 $1,452.50 on PBS drugs in a calendar year, your subsequent PBS medications in that year will cost $6.10 each in 2015.
- Concessional patients and their families (those with a Centrelink or DVA concession card) paying $6.10 per script can get free PBS medicine that year once they’ve spent over $366.00 in 2015.
- 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.
- For further information about drugs listed on the PBS and Safety Net arrangements, ask your pharmacist, contact the PBS Information Line on 1800 020 613 (free call) or collect a brochure at your nearest Medicare Service Centre.
Budget 2014 – proposed changes
From 1 January 2015:
- the general safety net threshold will go up to $1,597.80 per calendar year and will increase by 10% above inflation for a further three years.
- the concessional safety net will increase to 62 prescriptions in 2015 ($427.80 at $6.90 per prescription) and increase by two prescriptions each year for a further three years — from 62 in 2015 to 68 in 2018.
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’.
- 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 may not be counted towards the Safety Net threshold.