What is seniors health insurance?
Seniors health insurance is designed to meet the needs of Australian singles and couples aged 65 and over. It helps you claim back some of the costs associated with medical treatments, medications and healthcare services, depending on your policy.
Although insurance providers don’t offer products exclusively for seniors, they do provide coverage that’s often better suited to mature-age individuals. For example, a higher level of cover may be more appropriate for older adults who require specific care or procedures related to ageing (think joint replacements or cataract surgery).
Seniors health insurance can help fill payment gaps, reduce waiting times and give you more choice in healthcare providers. However, it’s important to consider your specific needs and budget before choosing a product.
What does seniors health insurance cover?
Private health insurance for seniors can include Hospital cover, Extras cover or both. You can also choose between singles or couples health insurance, depending on your situation. Here’s what’s generally covered:
Hospital cover for seniors
This helps cover the costs of being treated as a private patient in either a public or private hospital. This can include a range of expenses, such as surgery, medical fees, hospital accommodation, transport, and even meals during your stay. With Hospital cover, you have access to private healthcare options, which may help reduce wait times and provide you with greater flexibility in choosing your healthcare providers.
Hospital cover for seniors is typically available in four tiers: Basic, Bronze, Silver and Gold. Each tier offers different levels of coverage, with Basic providing the minimum level of care and Gold offering the most comprehensive protection. As you move up the tiers, you'll generally receive broader coverage for a wider range of medical treatments and services, but this will likely increase your costs.
While the specific details may vary between insurers, the basic structure of these tiers is generally the same across providers. For example, a Basic policy with one insurer should closely resemble a Basic policy from another, making it easier to compare options.
Extras cover for seniors
Extras cover helps cover the cost of services outside of hospital treatments, focusing on health and wellness needs that Medicare doesn’t fully cover. This can include services like dental care, optical, physiotherapy, chiropractic treatment, podiatry and hearing aids. Extras cover can help you manage these out-of-pocket expenses, making it easier to access important services for maintaining your health as you age.
Extras policies are also available in the same tiers as Hospital cover, each offering varying levels of coverage. A Basic policy may cover the bare essentials like dental check-ups and physiotherapy, while higher tiers like Silver or Gold could provide more extensive coverage, such as major dental (i.e. crowns, dentures), higher claim limits for optical, and coverage for psychology and podiatry.
The tiers are similar across providers and you’ll normally have the option to add a suitable level of Extras cover to your Hospital cover, or take it out as a standalone product. It’s worth considering which services are relevant to your health needs, how often you’ll use them and how much you’re willing to pay for premiums.
How to choose the best health insurance for seniors
Here are some ways for seniors to get the best health insurance:
1
Review your cover every year
As your health, lifestyle and financial situation changes, you’ll want to keep on top of whether you’re getting the maximum value out of your plan now but also into the future. This means doing an annual review of your health cover and thinking about what procedures or treatments may be required down the line.
For example, if you need a joint replacement, you may discover that your current policy doesn ’t cover it, particularly if you’re on a Basic or Bronze level of Hospital cover. Keep in mind that if you upgrade your cover to include treatments you weren’t previously covered for, you’ll likely need to serve waiting periods.
2
Choose a suitable level of cover
First, decide whether you need Hospital cover, Extras cover, or a combined policy. Then, compare your options by looking at what’s covered under each plan. A lower level of cover will cost less in premiums, but it also means fewer services and treatments are covered.
To make the best choice, focus on what’s most important to you, including the annual limits on claims for Extras cover (e.g. up to $750 a year on major dental for things like dentures, crowns and implants).
3
Play around with your excess
Your excess is the amount you have to pay for overnight hospital admissions or day procedures. Most insurers let you choose your excess, with options typically ranging from $0, $250, $500 or $750 for singles, and $1,000 or $1,500 for couples and family cover.
If you’re about to have surgery, a lower excess means you’ll pay less upfront at the hospital, but your premiums will be higher. A higher excess lowers your premiums, but you’ll pay more out-of-pocket when making a claim.
4
Check the waiting periods
Both Hospital and Extras cover have waiting periods for certain services and treatments. You must complete the waiting period before making a claim. This means if you’re upgrading your policy to cover a specific surgery, you’ll need to ensure it’s scheduled after you’ve finished serving the waiting period (i.e. two to 12 months).
When switching health funds, if you’ve already served your waiting periods or are partway through them, you won’t need to start over, as long as you choose the same or a lower level of cover. Some health funds also waive waiting periods for Extras to attract new members, often waiving two or six-month waits.
5
Consider sign-up offers and deals
New health insurance members can often enjoy sign-up offers, such as four to eight weeks of free premiums and waived waiting periods on Extras cover. Some providers also offer rewards like frequent flyer points or discounts on their other products like car or travel insurance. Just be sure to check your eligibility via the terms and conditions.
Seniors flock to Silver-tier Hospital cover
Chris Whitelaw, General Manager - Health Insurance at Money.com.au
“Recent data from the Private Health Insurance Intermediaries Association (PHIIA) shows that more than 70% of seniors aged 60 and over have at least Silver Hospital cover, suggesting that older Australians prefer more comprehensive coverage as they get older.”
Chris Whitelaw, General Manager - Health Insurance at Money.com.au
How much does seniors health insurance cost?
Seniors health insurance in Australia typically costs between $80 and $430 per month, according to Money.com.au’s analysis. What you pay will depend on the type of policy and level of coverage, among several other factors.
For example, a Basic Hospital-only policy might cost under $100 a month, while a Gold level policy with both Hospital and Extras cover may exceed $400 per month.
A recent Money.com.au survey found that the cost of private health insurance is the biggest barrier to entry, with 82% of Baby Boomers citing its expense as the reason they don’t have coverage.
Seniors health insurance cost comparison
This cost comparison is based on a 65 year old single in NSW with an income of $97,000 or less. Please note, the Hospital cover is based on a $750 excess.
Provider | Bupa |
|---|---|
Hospital cover (per month) |
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Extras cover (per month) |
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Combined Hospital and Extras (per month) |
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Provider | HCF |
Hospital cover (per month) |
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Extras cover (per month) |
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Combined Hospital and Extras (per month) |
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Provider | nib |
Hospital cover (per month) |
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Extras cover (per month) |
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Combined Hospital and Extras (per month) |
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Provider | HBF |
Hospital cover (per month) |
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Extras cover (per month) |
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Combined Hospital and Extras (per month) |
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Provider | Medibank |
Hospital cover (per month) |
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Extras cover (per month) |
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Combined Hospital and Extras (per month) |
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| Provider | Hospital cover (per month) | Extras cover (per month) | Combined Hospital and Extras (per month) |
|---|---|---|---|
Bupa |
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HCF |
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nib |
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HBF |
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Medibank |
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The actual cost of health insurance for seniors depends on the type of coverage you select - Hospital only, Extras only, or both Hospital and Extras. It’s also influenced by the coverage level (Basic, Bronze, Silver, or Gold). Other factors that affect the price include who the cover is for, your age, the state you live in, your income (since rebates are based on income levels), and your excess amount.
Are there rebates for seniors health insurance?
Yes, the government health insurance rebate helps reduce premium costs for seniors based on age and income. Individuals or couples with lower incomes qualify for higher rebates, as shown in the table below. These rebates and income levels apply for the 2024-25 financial year.
Age | 65-69 |
|---|---|
Base tier (single income under $97,000, couple income under $194,000) |
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Tier one (single income $97,001-$113,000, couple income $194,001-$226,000) |
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Tier two (single income $113,001-$151,000, couple income $226,001-$302,000) |
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Tier three (single income over $151,001, couple income over $302,001) | 0% |
Age | 70+ |
Base tier (single income under $97,000, couple income under $194,000) |
|
Tier one (single income $97,001-$113,000, couple income $194,001-$226,000) |
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Tier two (single income $113,001-$151,000, couple income $226,001-$302,000) |
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Tier three (single income over $151,001, couple income over $302,001) | 0% |
| Age | Base tier (single income under $97,000, couple income under $194,000) | Tier one (single income $97,001-$113,000, couple income $194,001-$226,000) | Tier two (single income $113,001-$151,000, couple income $226,001-$302,000) | Tier three (single income over $151,001, couple income over $302,001) |
|---|---|---|---|---|
65-69 |
|
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| 0% |
70+ |
|
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| 0% |
Pros and cons of seniors health insurance
Pros
- Generally provides faster access to healthcare and specialists, reducing wait times for non-urgent elective surgeries
- Gives you more flexibility in choosing where you want to be treated as a patient
- Higher government rebates for seniors on premiums based on income tiers
Cons
- Premiums can be out of reach for some seniors, especially for comprehensive coverage
- If you’re a couple, you can’t tailor the level of cover for each partner
- You won’t be immediately covered for some services and treatments as waiting periods apply
Is private health insurance worth it if you’re a senior?
There are both pros and cons to private health insurance for seniors in Australia. Some key benefits include being treated as a private patient, reduced waiting times, more choice in healthcare providers and assistance with out-of-pocket medical expenses. Our latest research highlights the top reasons seniors choose private Hospital cover:
- To choose whether they are treated at a public or private hospital (18%)
- To avoid the medicare levy surcharge (16%)
- To avoid being on waiting lists for operations (13%)
For Extras cover, the most common reasons were:
- Dental checkups and claims (59%)
- Optical products like glasses and contact lenses (28%)
- Physiotherapy, chiropractic care, occupational therapy and podiatry (9%)
While there are many benefits to private health cover, the cost can be too high for some seniors, particularly those who are on the pension or who don’t see its value. A recent survey by National Seniors Australia, an advocacy organisation for older Australians, found that 45% of full pensioners had no private health insurance, and 72% of respondents who didn’t have it had recently let their coverage lapse.
The main reasons for cancelling their health cover were unaffordability (63%), lack of value (40%), belief that the public system adequately covered costs (23%), and insufficient coverage for specialist costs (9%).
How much is the average benefit paid to seniors?
The average benefit paid to seniors by health insurance companies ranges from $726.02 to $1,717.33 for Hospital cover and from $98.65 to $164.86 for Extras. As shown in the graph below, benefits for Hospital cover tend to increase starting in the 65-69 age group. For Extras cover, it’s mostly the opposite.
