Need to know
- Things like cataract treatments and knee or hip replacements are usually only covered by the most expensive top-tier policies
- Five insurers, including Medibank, GMHBA and HCF, won’t charge you an excess for day surgeries such as cataract, colonoscopy or endoscopy
- Australians aged 60–79 use their hospital insurance more than any other age group
As you get older, your health needs can change, so it's vital to check you've got the right insurance policy for your current stage of life.
Seniors are more likely to need certain types of treatments and surgeries (such as cataract surgery or knee replacements, for example) that are usually only covered by the top-tier Gold and Silver Plus policies.
Here are our tips to help you check that you have the cover you need.
On this page:
- The four tiers of health insurance
- Do you have the right level of cover?
- Your policy includes pregnancy – should you downgrade?
- Should you pay a higher excess to reduce your premiums?
- Health funds that waive the excess for day surgery
- Should you drop health insurance altogether?
- Five steps to better, cheaper health insurance
The four tiers of health insurance
Health insurance policies are categorised into four tiers:
- Basic – very little if any cover in a private hospital
- Bronze – low cover
- Silver – medium cover
- Gold – full or top cover.
In between these main tiers there are also Silver Plus, Bronze Plus and Basic Plus policies, and these cover at least one service more than the Silver, Bronze or Basic policies.
For example, a Silver Plus policy might include cover for hip replacements or cataract surgery – services usually only covered under Gold policies.
Do you have the right level of cover?
As we age, we're more likely to need certain types of treatments and surgeries.
For instance, more than 40% of all hospital admissions for elective surgery (including things like hip and knee replacements) carried out in Australia in 2022–23 were for people aged 65 and over.
And older people are also more likely to end up in hospital. Over 65s make up 15% of the population, yet account for more than 40% of day and overnight hospital admissions, according to the Australian Institute of Health and Welfare.
Our table below shows the policy level you need to guarantee cover for these more common surgeries for seniors. You might find cover for these treatments in lower level tiers, but it's not guaranteed.
| To be guaranteed cover for: | Choose: |
|---|---|
| Heart surgery | Silver or Gold |
| Joint replacements | SilverPlus or Gold |
| Cataracts | SilverPlus or Gold |
| Dialysis | SilverPlus or Gold |
| Rehabilitation | SilverPlus or Gold |
| Palliative care | SilverPlus or Gold |
What to consider if changing tier
Waiting period
If you're looking at upgrading your policy to cover certain surgeries, remember that a 12-month waiting period applies for conditions you weren't covered for on your old policy. So if you require surgery, make sure it's scheduled for after you've served the waiting period.
Downgrading later
You may want to consider downgrading your cover once you've had the treatments you need. Top-level Gold policies can cost almost twice as much as the cheapest Silver policy offered by the same provider. This means you could be paying a premium to secure coverage for a handful of extra services you may never need, such as cover for pregnancy and birth.
Your policy includes pregnancy – should you downgrade?
Even if you're at the stage of your life where you're done having kids, the decision to downgrade to a policy that doesn't include cover for pregnancy and fertility is not as simple as it seems.
Pregnancy and IVF are covered by the top-tier Gold and some Silver Plus policies – but these tiers are also suited to people over 65 who want to be covered for surgery typically needed later in life, such as cataract surgery or hip and knee replacements.
A few health funds offer Silver Plus policies without pregnancy, but before signing up, make sure:
- it's actually cheaper than the cheapest Gold policies
- there aren't other restrictions on things you do need – for example, many Silver Plus policies don't cover hip and knee replacements or rehabilitation in a private hospital.
Should you pay a higher excess to reduce your premiums?
Until the health insurance reforms of 2019, the highest excess you could opt for was $500. But now you can choose to pay a higher excess of up to $750 per person and $1500 per couple/family to reduce your premiums.
An excess is the amount of money you pay out of your own pocket towards a hospital visit. You pay an excess once per hospital visit, and it's usually capped at once (single) or twice (couple/family) per year.
If you think you'll need surgery within the next two years, consider choosing a policy that has a lower excess
But if you think you'll need surgery within the next two years, consider choosing a policy that has a lower excess – you might pay a bit more for the premiums, but you won't be hit with high out-of-pocket costs if you do have to stay in hospital.
CHOICE tip: If you're switching from paying a higher excess to paying a low or no excess, keep in mind you'll have to serve a 12-month waiting period. You'll still be covered during the waiting period, but you'll have to pay the higher excess if you have surgery in that time.
Health funds that waive the excess for day surgery
If you think you'll need day surgery, such as cataract surgery, look for a policy that doesn't charge an excess for same-day patients.
These health funds don't charge an excess for day surgery on some of their policies:
- GMHBA
- HCF
- Health Care Insurance (HCI)
- Medibank
- RT Health
St.LukesHealth reduces the excess for day surgery.
Should you drop health insurance altogether?
Hospital cover
Public hospitals in Australia provide world-class health care if you have a serious or life-threatening illness. However, they can have long waiting times for elective surgeries such as cataract surgery or hip and knee replacements.
So if you're in the 65s and older bracket, and you already have health insurance and can afford it, we don't recommend dropping it.
Consider these factors as you get older:
- Increasing value for money: Australians aged 60–79 use their hospital insurance more than any other age group.
- Higher rebates: When you hit 65, you're entitled to a higher rebate – that's the amount the government pays that helps reduce your premiums. For singles earning up to $97,000 and couples/families earning up to $194,000, you'll go from a 24.6% rebate to a 28.7% rebate. When you turn 70, this increases to 32.8%.
- Partners and families benefit: When one member of a family or a couple is 65 or over, the government rebate applies to the whole family or couples policy.
Extras cover
You could consider dropping your extras cover, which pays you back a portion of expenses for services such as dental, optical and physio, and instead fund these yourself.
According to the Australian Prudential Regulation Authority, the average annual benefit paid out by the funds (the money that members receive back from their provider in a year) is only $464 per person. Compare this with the average extras premium of $930 for a single person in NSW (without the health insurance rebate) – about double the average benefit.
Just be aware you could be paying more than you'll ever get back
Extras cover may be useful if you have difficulty budgeting and would rather pay an insurer monthly rather than fork out hundreds of dollars in one hit for a large dentist bill.
But just be aware you could be paying more than you'll ever get back. And we suggest you compare quotes for separate hospital and extras cover (you don't have to get them from the same provider) rather than a combined hospital and extras policy, as you might find savings.
Five steps to better, cheaper health insurance
We've put together a handy five-step action plan to help you through the process of reviewing, comparing and switching your health insurance policy.
Just a few minutes could potentially save you hundreds of dollars per year.
Follow these five easy steps below.
We're on your side
For more than 60 years, we've been making a difference for Australian consumers. In that time, we've never taken ads or sponsorship.
Instead we're funded by members who value expert reviews and independent product testing.
With no self-interest behind our advice, you don't just buy smarter, you get the answers that you need.
You know without hesitation what's safe for you and your family.
And you'll never be alone when something goes wrong or a business treats you unfairly.
Learn more about CHOICE membership today
Stock images: Getty, unless otherwise stated.
