Critically ill fear treatment cost

One in three Australians surveyed for the AIA Healthy Living Index 2018 are concerned about their ability to meet the potential costs of critical illness.

AIA’s annual survey shows the ‘financing gap’ between healthcare provisions and the expected real costs of serious illness, according to a spokesperson for the life insurance group.

The survey found that people in Australia faced a considerable ‘financing gap’ where savings, current levels of insurance and government health provisions might not be enough to pay for the treatment of critical illnesses such as cancer, heart disease and diabetes.

Concerns about the cost of health care in retirement formed the basis of YourLifeChoices’ June edition of the Retirement Affordability Index™, The Longevity Issue.

The Australian Council of Social Service (ACOSS) believes that a secure and dignified retirement rests on three pillars: an adequate income, affordable housing and quality, affordable health and aged care.

ACOSS senior adviser Peter Davidson said: “It’s vital that we avoid a two-tier healthcare system – one for the top half of the population and another for the bottom half, of the kind that has long existed in the United States and still exists in dental care in Australia …

“The challenge for governments is how to pay for the inevitable increases in the future costs of existing healthcare programs, while closing the worst gaps in services (including dental and mental health services and the expansion of the NDIS).”

Senior economist with The Australia Institute Matt Grudnoff reported that healthcare was a key driver of price increases in the June quarter, particularly for two of YourLifeChoices’ retirement tribes, Cash-Strapped Couples and Singles – retirees who own their home and are on part or full Age Pensions. This was because many were struggling to hold on to their private health insurance.

Mr Grudnoff explained: “… lower-income households view healthcare as a non-essential category that they can cut back on because their budgets won’t stretch that far.

“This is concerning for several reasons. Skimping on healthcare is likely to reduce quality of life and, potentially, lifespan. It can also increase the total cost to the health system.

“If people avoid going to a specialist or other health professional early, then small, easily treatable problems can turn into large expensive problems.”

The AIA Healthy Living Index Survey highlights prevailing health trends, motivations and concerns for individuals across the Asia-Pacific.

AIA Australia and New Zealand chief executive Damien Mu said of the survey results: “There is a real and justifiable concern amongst the public regarding their ability to cope financially at a time when they should be focusing on being well and getting well.

“This report informs us that one in three of the Australians surveyed are concerned about their ability to meet the potential costs of critical illness. When asked to estimate the cost of treatment for cancer, almost half (46 per cent) of those surveyed, estimate an amount that would have serious financial implications for them.”

It’s not all bad news, however, with the report highlighting that people in Australia are ranked second in the Asia Pacific region for having had a medical check-up in the past six months.

For those who did not go for a check-up, cost and time were the most common reasons given. For Australians, more than 70 per cent of those surveyed had had a medical check-up in the past year, with a higher proportion in the 45 years or above age group (85 per cent).

YourLifeChoices members were quick to respond when asked for their views on private health insurance. These were typical:

“I have had private health cover for at least 45 years and am seriously considering if it is worthwhile. Now I’m in my 70s, it scares me to drop out but when I had surgery just over a year ago, my out-of-pocket costs were $5000. I just can’t afford bills like this any more.”

“Any insurance company provides a service for one thing only. Profit. We joined Medibank Private when it first started, and we received a fair return. Then, as we got older and Medibank was sold off, the cost went up and the rebates went down.”

Are you planning for the likelihood of increased healthcare costs in later life? Are you managing to hang on to private health insurance?

Related articles:
Retirees’ out-of-pocket pain
Do you really need your extras?
The real cost of living longer

Written by Janelle Ward

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