Understanding the Medicare Safety Net
Medicare could be compared to a public insurance agent. It will offer a rebate for the medical services you receive. In the past many doctors accepted this rebate alone which we have referred to as bulk billing.
Unfortunately, this is no longer sufficient payment to cover general practice running costs. This is mainly because the general practice rebate hasn’t risen with the cost of inflation since medicare was designed. As a result ‘bulk billing’ is becoming less and less common in General Practice.
When a practice or out-of-hospital medical service charges you a fee, it will generally be higher than the associated rebate. Once you receive the rebate/subsidy amount, the cost left over is your out-of-pocket cost.
Example:
- Consult fee = $110
- Rebate amount is $39.75
- $110 – $39.75 = $70.25
- Therefore $70.25 is your out-of-pocket costs.
Once your total out of pocket costs per calendar year reach the threshold amount, medicare will pay 80% of your out-of-pocket costs. The threshold amount varies dependant on your tax bracket. If you have a concession card it is $717.90, if you are a non-concession or pension card holder it is $2249.80. If your a family or a couple your collective out-of-pocket costs will contribute to $2249.80 or $717.90 BUT only if you register as a family/couple. If you do not register as a family or couple you will be considered as individuals and have to individually reach the threshold to trigger a reduction in your healthcare costs. Even if you are all on the same medicare card, you still have to register as a family or couple.
Visit this link to find the forms to register as a family or a couple. https://www.servicesaustralia.gov.au/ms016
In the below sum we approach the same consult fee that we calculated earlier but explore the cost once the threshold has been triggered.
- $110 – $39.75 = $70.25 out of pocket.
- 80% of $70.25 = $56.20 (which will now also be paid by medicare)
- So the cost now changes to: $110 – ( $39.75 rebate + $56.20 EMSN)
- Therefore $14.05 is your out of pocket.
Often individuals reach the threshold and don’t know. Many families will reach the threshold when they seek private obstetric/ pregnancy care. It is important to remember that the out of pocket fee that you pay for any private specialist (out of hospital consult), medical imaging, blood test or allied health professional contributes to the out of pocket cost registered to you by medicare.
You can check out where you and your family are sitting against the threshold limit online via mygov. There is a picture of what this might look like on your phone attached to this post. Visit this link to find out more:https://www.servicesaustralia.gov.au/extended-medicare…
