You never know when you or someone in your family might get sick, and if you find you require multiple visits to doctors or specialists in any one calendar year, healthcare costs can start to pile up. The Medicare Safety Net is a Federal Government scheme that aims to assist Australians in this situation, by reducing their out-of-pocket medical costs.
Shopping around for a health insurance policy?Find a policy that meets your needs from 15+ funds in just a few clicks.
Though the safety net has been a feature of Medicare for several decades at this point, many Aussies may not be aware of its existence, or how exactly it works.
In this article, we will answer some key questions about the Medicare Safety Net, including:
- What is Medicare?
- What is the Medicare Safety Net?
- How does the Medicare Safety Net work?
- What services are covered by the Medicare Safety Net?
- What services are not covered by the Medicare Safety Net?
- How do I access the Medicare Safety Net?
- How does the Medicare Safety Net work for families?
- How do I check my Medicare Safety Net balance?
What is Medicare?
Medicare is Australia’s universal health care scheme, a publicly-funded program that either partially or fully covers the cost of most primary health services in the public and private systems. There are three main components to Medicare: hospital, pharmaceutical and medical.
Under the hospital component of Medicare, you can be treated as a public patient in a public hospital at no charge, by a doctor of the hospital’s choosing. You can choose to be treated as a public patient even if you are privately insured.
In terms of the pharmaceutical component of Medicare, the Pharmaceutical Benefits Scheme (PBS) means you only pay part of the cost of most prescription medicines – that is, most medicines that are prescribed to you by a doctor, and not sold over the counter. The rest is covered by the PBS.
Under the medical component, the range of services covered by Medicare includes:
- Consultation fees for doctors, including GPs and specialists
- Tests and examinations by doctors needed to treat illnesses, such as x-rays and pathology tests
- Eye tests performed by optometrists
- COVID-19 vaccinations and suitability assessments from accredited GPs
- Most surgical and other therapeutic procedures performed by doctors
- Some surgical procedures performed by approved dentists
- Specific items under the Cleft Lip and Palate Scheme
- Specific items under the Enhanced Primary Care (EPC) program
- Specified items for allied health services as part of the Chronic Disease Management Plan
Medicare does not provide cover for such things as:
- Examinations for life insurance, superannuation or memberships for which someone else is responsible (e.g. a compensation insurer, employer or government authority)
- Ambulance services, although note that these are publicly funded by some state governments.
- Most dental examinations and treatment
- Most physiotherapy, occupational therapy, speech therapy, eye therapy, chiropractic services podiatry, or psychology services
- Acupuncture (unless part of a doctor’s consultation)
- Glasses and contact lenses
- Hearing aids and other appliances
- Home nursing
Private health insurance may cover some of the services not covered by Medicare – for example, dental examinations and treatment, as well as glasses and contact lenses. This will depend on your choice of policy and level of cover.
The Medicare Benefits Schedule (MBS) lists every service that is eligible for a Medicare rebate, and each one of these services has what’s called a “scheduled fee amount”. Medicare will pay a portion of this amount, and you will pay the difference. There can also be a ‘gap’ – this is the amount left over if your doctor charges an amount that is higher than the scheduled fee amount. This ‘gap’ is what you have to pay for the treatment.
Compare Health Insurance with Canstar
The table below displays some of our referral partners’ hospital and extras policies for a 39-year-old single female seeking cover in NSW without pregnancy cover. The table is sorted by Star Rating (highest to lowest) followed by provider name (alphabetical). Use Canstar’s Health Insurance comparison selector to view a wider range of products. Canstar may earn a fee for referrals
What is the Medicare Safety Net?
The Medicare Safety Net is a scheme that reduces out-of-pocket expenses for people who need frequent medical care. If you find you require regular GP visits or blood tests, for example, then you may well be ‘caught’ by the safety net.
In essence, the safety net means that once an individual or family hits a certain threshold of payments in a calendar year, they will be entitled to get more money back from Medicare, in order to offset their medical costs and provide some financial relief.
How does the Medicare Safety Net work?
When an individual or family meets a certain threshold of out-of-pocket and ‘gap’ payments in a calendar year, they become eligible for higher Medicare benefits, thanks to the Medicare Safety Net. While they won’t pay less for any doctor’s visits or procedures, they will be reimbursed more once they hit the relevant threshold for their situation.
There are three different “threshold amounts” for the Medicare Safety Net, with each one corresponding to how much an individual or family has to spend before they can start receiving a higher benefit for the rest of the calendar year. Access to the thresholds depends on personal circumstances – the Original and Extended General thresholds apply to all Medicare card holders, whereas the Extended Medicare Safety Net (EMSN) is a more generous alternative to the Extended General safety net which is only available to concession card holders and families eligible for the Family Tax Benefit.
The three thresholds for 2021 are as follows:
- Who is it for? All Medicare card holders
- What is the annual threshold amount? $481.20
- How is it calculated? Based on gap amount
- What does it cover? 100% of the schedule fee for out-of-hospital services
Extended Medicare Safety Net (EMSN) Concessional and FTB Part A
- Who is it for? Concession card holders and families eligible for Family Tax Benefit Part A
- What is the annual threshold amount? $697.00
- How is it calculated? Based on out-of-pocket costs
- What does it cover? 80% of out-of-pocket costs or the EMSN benefit caps for out-of hospital-services
- Who is it for? All Medicare card holders
- What is the annual threshold amount? $2,184.30
- How is it calculated? Based on out-of-pocket costs
- What does it cover? 80% of out-of-pocket costs or the EMSN benefit caps for out of hospital services
These threshold amounts are set on January 1 each year, and are calculated based on the Consumer Price Index. The figures shown in the above table are current as of January 2021 for the 2021 calendar year.
What services are covered by the Medicare Safety Net?
The Medicare Safety Net applies to a range of out-of-hospital medical services and tests. These are listed under the MBS, and can include such things as:
- Consultations with GPs and specialists
- Blood tests
- CT scans
- Pap smears
What services are not covered by the Medicare Safety Net?
The Medicare Safety Net does not cover:
- Medical services that are not included in the Medicare Benefits Schedule, such as physiotherapy, occupational therapy and speech therapy
- Treatments received in hospital
This means that if you are admitted to hospital, the services you receive there, such as surgeries, doctor’s visits and tests, are not covered by the Medicare Safety Net. As mentioned earlier, however, public patients can still receive free treatment in public hospitals under Medicare.
It is important to note that some procedures such as day surgeries may be considered as hospital treatments, even if they are not actually conducted in hospitals.
If you are due to undergo a procedure and are unsure whether it’s considered an out-of-hospital service, you can ask your doctor for clarification.
How do I access the Medicare Safety Net?
Anyone who is enrolled in Medicare is automatically eligible for the Medicare Safety Net. If you’re single, then you don’t need to do anything – the government’s Services Australia advises that Medicare will automatically pay you higher benefits once you reach your threshold. If you are part of a couple or a family, though, then you will need to register if you want Medicare to keep track of your combined medical expenses over the course of the year and count them all towards the same Medicare Safety Net threshold.
How does the Medicare Safety Net work for families?
If you are part of a couple or family and want to combine your healthcare costs to reach a safety net threshold sooner, Services Australia says you’ll need to register as a Medicare Safety Net Family, even if all members of your family are already covered on the same Medicare card. Families can register or advise of changes in their family situation by filling out the Medicare Safety Net Registration and Amendment for Couples and Families (MS016) form, available on the Services Australia website, or by calling Medicare on 132 011, 24 hours a day.
For the purposes of the Medicare Safety Net, a “family” is defined as either:
- A couple who are legally married and not separated, or a couple in a de facto relationship, with or without dependent children; or
- A single person with dependent children
In turn, a “dependant” is defined as someone who is financially dependent on the family and is either:
- A child dependant aged under 16 years; or
- A student dependant aged between 16 and 25 who is studying full-time
In cases where a dependant is part of two Medicare Safety Net families because of separation or divorce, their medical expenses will count towards the Safety Net of the family whose Medicare card is used to claim the benefit (i.e. the family paying for their out-of-pocket medical costs).
How do I check my Medicare Safety Net balance?
Information about your Medicare Safety Net details, including your claims history and how close you are to meeting your annual threshold, can be found online. You can check it by logging into your myGov account or by using the Express Plus Medicare mobile app.
— myGov (@myGovau) December 1, 2016
Original article written by James Hurwood
Image source: Monkey Business Images/shutterstock.com