8th Jul 2018

The true cost of longevity is healthcare

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The true cost of longevity is healthcare
Leon Della Bosca

Australians are living longer, putting pressure on retirement incomes, the Age Pension and government spending on welfare, aged care and support for older people. But, as revealed in the Retirement Affordability Index™ June 2018 – The Longevity Issue, the real cost of living longer is healthcare.

It’s no secret that the population is ageing. In 2016, 15 per cent of the population was aged 65 and over, with almost 13 per cent of those 85 years and older. So, of 24.3 million Australians, 3.65 million are aged over 65. By 2056, this number is expected to increase to 8.7 million.

With this increased longevity comes a heightened risk of health problems – which hits the hip pocket of both the individual and the economy.

The cost of private health insurance rises each year. While 75.8 per cent of YourLifeChoices members surveyed in the YourLifeChoices Insights Survey 2018 say their health is either good or excellent, the cost of healthcare remains a great concern to those aged 54 and older.



More than 71 per cent of our members who participated in the Retirement Income and Financial Literacy Survey 2018 do have private health insurance, but there is a real fear they will not be able to keep paying for coverage throughout retirement.

“It is ridiculously expensive, and I fear that when I retire I will no longer be able to afford it,” said one member.

Others question the affordability and efficacy of health insurance.

“Currently, gap payments make it worthless,” said another member.

Private health insurance is a major cost for most older people – especially the 70 per cent on a part or full-Age Pension who struggle to make their money last between payments.

According to the YourLifeChoices Retirement Affordability Index™ June 2018 – The Longevity Issue, released on Sunday, Australia Institute senior economist Matt Grudnoff said that Constrained Couples – those on an Age Pension who own their own home – are currently bearing the brunt of rising healthcare costs.

“This is primarily because Constrained Couples spend the largest proportion of their income on health. Cash-Strapped Couples and Singles spend the smallest proportion of their income on health and so it impacted them the least,” said Mr Grudnoff.

Then there’s the cost to the Government, specifically, Medicare.

The last Census found that Australians aged 65 and over accounted for 28 per cent of the 123 million claims for GP visits – twice as many claims per person for that group than for those aged under 65.

There were also 12.5 million specialist visits claimed through Medicare in 2014–15, four times as many than for people aged under 65.

A Monash University-CSIRO report in 2016 estimates that as a result of an ageing population, health expenditure per person will rise from $7439 in 2015 to $9594 in 2035 – an increase in total expenditure from $166 billion to $320 billion or an average annual growth of 3.33 per cent.

The most recent numbers show that hospital and medical costs for those over 54 have risen by 1.5 per over the last quarter alone.

Read about this in detail in the YourLifeChoices Retirement Affordability Index™ June 2018 – The Longevity Issue

How much do you spend on healthcare? Do you find it difficult to manage the cost of health insurance? How much do you sacrifice to maintain your insurance?


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COMMENTS

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OnlyGenuineRainey
9th Jul 2018
9:49am
No health insurance. Can't afford the monstrous gap charges! Yes, health costs are a problem, but the bigger concern for me is that we carefully saved to have money to cover those costs and now we are suffering for it and won't have the money when it's needed. While the government happily hands out to folk who didn't save, it's forcing us to use our health care budget to live on until we are ground into hardship and then finally qualify for a part pension - maybe, if they don't change the rules yet again! Why is it okay to gamble, drink, party, holiday, buy expensive clothing, etc. - even give money away (5 years before retirement) or buy an expensive luxury mansion, but NOT to save for health care costs? No wonder the government is finding the cost of health care a problem!
Cowboy Jim
9th Jul 2018
10:33am
We are in private health insurance, cannot really afford to drop it. Pay it in advance to have less in an account for deeming. For the gap payments I have a little cash hidden away, also to be used for other unforeseen situations.
Now why is the Govt complaining about us living longer and on the other hand wants us to stop smoking, drinking and partying? We have now the dearest cigarettes and alcohol outside the Scandinavian countries. I smoked for 32 years and gave it up just because I could no longer justify the exorbitant costs. Was easy to start as a kid when a packet of filter tipped cost 25c. If the authorities want us to pass on at an earlier age they should encourage bad habits.
Old Geezer
9th Jul 2018
10:45am
We have private health insurance too and pay no gaps. We get back more each year from our health insurance than we pay for it. I pay 18 months in advance to get the cheaper rates. Don't smoke or drink so no idea cost of those.
Grateful
9th Jul 2018
10:47am
Here we go again. The Alfred Doolittle theory.
The undeserving poor are ruining the economy.
Don't pay them anything.
Surely Australia's social morality has changed since Alfred's times?
TREBOR
9th Jul 2018
11:16am
Many of those without did save and worked hard, Rainey - don't wander into that long refuted idea that there are lifters and leaners... many who claim lifter status wouldn't know how to life.

I'd like to see some of Joe's 'lifters' try the 'leaner' lifestyle for a change.... they'd die of it.
Anonymous
9th Jul 2018
3:47pm
OG - you can only not pay any gap, simply by not using your private health insurance. Are you seriously asking us to believe you have some magic relationship with a health fund, and by extension, medicos, including anaesthetists, radiology and pathology - not to forget the 'assistant' at any operation, and they all magically toe the line? I simply find this hard to believe - what part of the country are you in? Major city? If the greedy medical profession gets hold of this info, they will be down on you like a ton of bricks!
Old Geezer
9th Jul 2018
4:24pm
Big Al I spent a week in hospital a couple of months back after being transferred from one hospital to a major hospital by ambulance and it cost me nothing at all. I even got free TV thrown in whereas they charged everyone else $10 a day. That included a CT scans and lots of pathology tests plus a course of antibiotics to take home. Even the GP visit for a follow up was bulk billed as well. The last operation (elective surgery) I had also cost me nothing at all. I always ask how much it is going to cost me before I agree to anything.
TREBOR
9th Jul 2018
6:30pm
Never mind Ebergeezer, Al - he's in front of the eight ball every time... or is that behind the eight ball? He's got every single little clue worked out so he pays for nothing and reaps huge benefit while not even voting... and everyone falls at his feet to give him red carpet treatment.

In most situations that would be titled 'fantasist'... he and a few others here, with their cunning investments etc, do better than the stock market they claim to invest in...

I'd say there was a lot of dreaming going into those investments....
OnlyGenuineRainey
9th Jul 2018
9:34pm
Ignore OG. He lives in la la land and dreams constantly. Hasn't a clue about reality, much less an ounce of human decency. He has no interest in anyone or anything other than making egomaniacal rants to try to convince us all he is wonderful, the world is perfect, and anyone who isn't living permanently on Cloud 9 and playing winning hands continually is a useless idiot.
Eddy
9th Jul 2018
10:20pm
I suspect OG went onto a public hospital as a private patient. His/her description of the "extras' he/she received is almost exactly what I received as a private patient in a public hospital. The reason I went to a public hospital was that was where the ambulance took me when I collapsed at home. I would hate to be so ungenerous as to suggest OG has betrayed his principles by accepting 'welfare' in the public hospital system.
George
10th Jul 2018
8:03pm
"There were also 12.5 million specialist visits claimed through Medicare in 2014–15, four times as many than for people aged under 65."
I bet that 99% of them paid huge gaps to many greedy Specialists (also caused by Govt not setting realistic Medicare Rebates) - the analysis has failed to reveal how much over 65s have been fleeced because the Govt does not cap Specialist fees or set realistic Rebates. These Gaps are the biggest problem.
TREBOR
9th Jul 2018
11:12am
I spend petrol money on healthcare and invest a little of my time in it... not a bad return from my investment... especially considering that travel costs are reimbursed...

The reason older folks have more specialist attendances etc is that they usually have a host of problems and it seems that one problem arises after another. Inevitable partly due to past conditions of work and such, given that much work was physically hard and there were huge industries with some air issues and such.
Rosret
9th Jul 2018
12:41pm
...and the older we get the more complex the procedures. While I acknowledge specialists need to be rewarded for their 20 years of education post school the fees can be shockingly expensive (and pitifully covered by private health).
Anonymous
9th Jul 2018
3:02pm
Trebor - most illness is due to unhealthy lifestyle habits too, like eating crap, boozing, smoking and not exercising consistently from a young age
TREBOR
9th Jul 2018
6:35pm
Not necessarily, Rafe - a lot of illness in older age particularly is a genetic lottery. My family, for instance, with their North German Plain ancestry, all have heart troubles. Some families are notorious for cancers, and any health professional will tell you that if your family has it, your chances are high that you'll have it.

Some may be suffering later as a result of bad lifestyle choices and such, but that's not the whole deal by any stretch.

I, for one, as an example, did not drink or smoke for most of my life, and was physically fit and active up to 24 hours a day... at 48 I was still able to do twice as much as men half my age .... at 51 I had an 'ant sting' in my chest.. and was diagnosed with severe cardiac artery problems...

Genetic lottery. Now I drink and don't exercise much and eat too much (that cook is too good), and it makes little to no difference.
OnlyGenuineRainey
9th Jul 2018
9:27pm
Raphael, your arrogance and gross ignorance is sickening - though I doubt you are really ignorant. Just a vile and disgusting judgemental troll, more likely.

Our health problems stem from deprivation and abuse in childhood - deprivation and abuse resulting from illegal acts by lying bureaucrats and the cruelty of church officials. The problems were compounded by unhealthy and dangerous work conditions and work accidents that, though deemed minor at the time, led to long-term problems that, conveniently, can't be compensated because the employer closed down.

I have never smoked or drank, and I always exercised well and continue to strive to keep fit. My partner never smoked. My partner drinks - because it's the only way to relieve PTSD and severe anxiety, sleep at night, and avoid night terrors. But drinking is very controlled and although doctors recommend cutting down, they admit liver and kidneys are in top condition. Major health problems - apart from psychological problems resulting from major abuse, deprivation of love and affection in childhood, and obstruction of any contact with family, and suffering extreme bullying in the military at a very young age - are in bones and ligaments, and result from injury.

It's appalling how the vile and judgemental privileged SCUM here condemn others dishonestly, evidencing not the slightest capacity for empathy - nor even basic human decency.

It is the ability to have empathy that makes us human, Raphael. You have clearly shown yourself to be an inhuman monster.
Anonymous
10th Jul 2018
1:18am
No need to be abusive Rainey
I said most illnesses
You and your partner obviously fall outside the norm
Just like most people on OAP welfare never saved and spent like drunken sailors
Grateful
10th Jul 2018
5:59pm
Raphael. Generalizations like you make are a sure sign of ignorance and narcissism. Sooner that you get a check up the better.
OnlyGenuineRainey
12th Jul 2018
2:29pm
No Raphael. My partner and I ARE the norm. A minority suffer ill-health due to abuse or neglect of their well-being.

And I am NOT receiving an OAP and never spent like a drunken sailor. I am self-supporting and will likely remain so for my entire retirement, unless health care costs drain my savings prematurely. What irks me is that BECAUSE I saved responsibly to meet known future health care costs, I now am forced to use those savings to live because I can't get any pension or benefits at all, so I can't use my savings for the purpose they were intended. I went without luxuries for no benefit to me - but only for the gain of the taxman. That's wrong!
Chooky
9th Jul 2018
11:28am
I’d like to see an independent inquiry into the private health industry. One fund’s gap is $1,400 and another is $500 for the same procedure.
I’ve just spent two weeks in private hospital and private rehab. The care was lacking and the food served in rehab was simply appalling. I’m guessing there is the same budget principles applied as in aged care of $6 per day. Terrible and we pay megabucks for it.
Rosret
9th Jul 2018
12:42pm
Agreed. Let's start with the dental industry.
Triss
9th Jul 2018
7:00pm
I’m with you there, Rosret.
dreamer
9th Jul 2018
12:02pm
I have private health because I can afford it, living in the city I have had it for 30-40 yrs its helped me a couple of times if I couldn't afford it I would stop straight away
KB
9th Jul 2018
1:37pm
I agree but cannot really afford it. Now wondering if this is worth it since I now to have pay the government back this year. The government is greedy,
Cowboy Jim
9th Jul 2018
2:17pm
KB - cannot really understand you having to pay the Govt back, unless you have a nice little earner going somewhere. I never get anything back or having to pay someone back when it comes to health insurance.
Old Geezer
9th Jul 2018
2:32pm
Sometimes if you pay your health insurance in advance the insurance company takes out too much discount and you have to pay a few dollars back at tax time.
Cowboy Jim
9th Jul 2018
2:39pm
Thanks OG for the explanation. My fund does not allow me to pay more than 12 months in advance otherwise I would have done it.
Old Geezer
9th Jul 2018
4:25pm
You can legally pay up to months in advance.
Cowboy Jim
9th Jul 2018
6:28pm
How many months OG? You not give the figure.

9th Jul 2018
2:44pm
71% have health inbsurance
the other 29% should get insurance or just rely on our excellent taxpayer funded system for emergency procedures
i dont see what the problem is
Anonymous
9th Jul 2018
4:09pm
Not sure where you dreamed up those figures, Raph?? Are you saying that 71% of the population is covered by private health insurance? More like about 35 - 37% according to the last figures I saw. Even in its hey day, there were no more than 45% of the population holding private health insurance. Check your facts, old fella!
Anonymous
9th Jul 2018
4:30pm
from the ylc survey Big Al - see above

anyway , point is, those without insurance still get excellent taxpayer funded medical care
Greg
9th Jul 2018
5:58pm
More errors in what you say - it's 71% of the surveyed members not of the population.
Anonymous
9th Jul 2018
6:27pm
71% or 17% it doesnt matter

point is we have an excellent medical system funded by the 10% of individuals who pay 90% of the taxes and our well run corporations
Cowboy Jim
9th Jul 2018
6:33pm
That explains the 71% as a lot of the population have not even got PC access never mind private insurance. A lot of people on the YLC webpage participants are financially and mentally literate and do not take in the whole population.
Anonymous
9th Jul 2018
7:00pm
I dunno Jim. We have posters like Mick and Know-it-All who are far from mentally literate
musicveg
9th Jul 2018
8:38pm
It is not that people are living longer, there are just more people, and often they are not living healthy. I use preventative medicine because I cannot afford to get sick and pay insurance, my insurance is eating Wholefood plant diet and exercise.
mareela
9th Jul 2018
9:13pm
Rainey, as much as I agree pensions changes have made it difficult for many pensioners I really object to your generalisation that those on a pension or part pension have spent their life pissing their money up a wall, gambling, partying, holidaying etc. Can’t see how anyone can sympathise with you with your judgemental assumptions.
OnlyGenuineRainey
9th Jul 2018
9:29pm
I'm not generalizing, Mareela. Many pensioners and part pensioners were frugal and responsible, but suffered misfortune. But vast numbers WERE spendthrifts. That's a fact - not a judgement. I have deep sympathy for those who genuinely could not accumulate savings. I know what poverty is. I've been there. But depriving people for saving is going to create more poverty in the long run. It does NOT help anyone.
Seenitall
9th Jul 2018
10:12pm
I'm getting towards mid seventies now and have never had health insurance in my life. Six years ago my brother (younger and slimmer than I am) had a classic severe chest pain type heart attack (while being fortunate enough to be close to a major hospital) which resulted in successful triple bypass surgery as a public patient - he's now back playing social tennis. Naturally this prompted me to get checked out myself (strong family history of coronary artery disease) and an angiogram showed I had 90% blockage in my LAD (the main coronary artery the medical profession jokingly calls "the widow maker") and significant blockages in two others. My coronary artery disease was deemed to be "stable" and because I had never suffered any severe chest pain I waited over three months for my own "elective"triple bypass surgery which has been a complete success.
I did ask the surgeon if the surgery would have been done more quickly with private health insurance and he denied this but I don't believe him.
Can't complain though, my experience as a public patient was very good and I don't think that once inside the hospital, and postoperativley, it would have mattered if I was privately insured or not.
I don't feel guilty about having had life saving surgery as a public patient (my total bill for the hospital stay was for a small amount for overnight pre-op accommodation and a $35 bill from the hospital pharmacy) as I have paid a bomb in tax over my working life in circumstances where I had no real means of tax minimalisation. Although it would be much too late for me now I don't feel I should have to prop up the private health insurance industry with its incredibly expensive administrative infrastructure and cushy CEO salaries who, like any other form of insurance, only make their real money by not paying out.
The public health system in this country is very good when it really matters and I am extremely grateful for that but the problem is that as many other people wake up to that fact and drop their private cover to accept a good but more basic level of care the strain on the public system will eventually break it. The Government's present freeze on bulk billing rates for GPs is a good example of how the public health system could be slowly run into the ground.
KB
9th Jul 2018
11:46pm
Yes it is becoming unaffordable for me considering the long waiting list to have hip surgery where in South Australia health insurance is a must. Now the government me is slugging me because of the rebate due to low income. Unfair,
Anonymous
10th Jul 2018
12:38am
How is the government slugging you
You have a right to free surgery . Just have to wait it out . This is how socialized medicine works for non life threatening medical cases
robmur
10th Jul 2018
1:56pm
Any government of any persuasion with a small inkling of common sense and nous must realise that the three major essentials that are sending people to the wall are:
- the cost of retaining private health.
-the huge rise in cost of electricity.
- the huge rise in cost of electricity.

Isn't it time for governments, both state and federal to take over the realistic pricing of these essential. A so called cap is put on private health by the Federal Minister. This cap every year has been well above the annual increase in inflation. The inflation rate is the benchmark for any increases in essentials.

Of course, what hasn't been included are the rising costs of food, house/content and car insurance, transport and fuel costs. No wonder families are struggling and many aged pensioner are finding it hard to exist.
Rae
11th Jul 2018
3:07pm
Government responsibilities for the huge taxes we pay included health, education and electricity. NSW could have used the billions of profits from electricity to pay for education and health. Total incompetence in managing public assets and doing their jobs.
Instead we are subsidising the Chinese Communist Party and whining about not liking Socialism. Stupid is as stupid does most definitely.
KB
12th Jul 2018
2:48pm
Just checked on my policy for eye surgery. Not included and would have to pay another $6.00 to cover if I needed surgery. Will just have to take my chances with the ailing public system, Need to save for out of pocket expenses before another hip replacement next year Eye surgery should be included for older people,


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