More above-inflation healthcare costs hitting older Aussies

Out-of-pocket elective hospital treatment expenses have increased by 6.7 per cent over the past 12 months, according to the latest private health insurance statistics from the Australian Prudential Regulation Authority. The average out-of-pocket gap fee is now $426.80 compared with just over $400 a year ago.

This increase comes on top of a number of other big increases in healthcare for older Australians over the past year. In April, health insurance premiums increased by an average of 3.03 per cent. However, consumer advocate CHOICE found some of the larger funds raised some premiums by up to 15 per cent on some policies.

Meanwhile, The Australia Institute’s Matt Grudnoff pointed out in YourLifeChoices’ most recent Retirement Affordability Index that the cost of pharmaceutical products had risen by 7.1 per cent.

With inflation over 12 months  sitting at 3.6 per cent, this suggests healthcare costs are significantly outpacing both inflation and Age Pension  indexation, placing further pressure on seniors’ budgets. 

YourLifeChoices analysis suggests that in the first quarter of this year couples on the Age Pension had only between six and eight dollars a week extra left to play with after inflation was taken into account.

Senior and super groups raise the alarm

The latest figures come as other organisations highlight alarming increases in healthcare costs for older Australians. Last year, the National Seniors Association (NSA) found that over a quarter of seniors were forgoing dental checkups and treatment due to costs, and up to 7 per cent of retirees couldn’t afford prescription medication and GP visits.

The NSA has called on the federal government to implement a Productivity Commission review of the private health insurance system to bring down out-of-pocket costs for older Australians.

In addition, the Association of Superannuation Funds of Australia (ASFA) found that the cost of funding a comfortable retirement increased by 3.3 per cent over the last 12 months, with medical expenses and insurance premiums leading the rise.

In the past quarter, the ASFA Comfortable Retirement Standard rose 0.7 per cent to hit a record high of $72,663 per year for couples, and $51,630 per year for singles. 

“Retirees continue to feel considerable cost-of-living pressure on their household budgets. Fortunately, in the past three months, we’ve seen the pace of price rises ease somewhat in key spending categories, namely food and fuel,” ASFA CEO Mary Delahunty said.

What are the highest out-of-pocket costs for hospital treatment in Australia?

Plastic and reconstructive surgery has the highest average gap fees with 48 per cent of the total fee typically needing to be covered out of pocket. Urology and ear, nose and throat hospital treatments have a 33 per cent and 36 per cent out-of-pocket cost respectively. Anaesthetist fees typically attract a 24 per cent gap fee.

The ACT has the highest average gap payments of all states and territories, with New South Wales the second highest. In contrast, the average gap fee in South Australia for the past quarter was just $155.47.

How much have you had to pay out of pocket for hospital treatment? Have you gone without essential medicines or treatments because you can’t afford it? Let us know in the comments section below.

Also read: hy retirement in 2024 is getting less affordable

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