What you should know about the cost of seniors health insurance

What you should know about the cost of seniors health insurance
senior couple happy in retirement living at home
senior couple happy in retirement living at home

The Cost of Health Insurance for Seniors

As you enter your senior years, what you need from your healthcare practitioners will change. But that also means you must have the right type of health insurance. For older Australians, private health insurance means you can get the medical services you need with shorter waiting times for elective procedures and greater peace of mind.

The reality for many of us, however, is that actually taking out private health cover can be a daunting prospect – especially with rising premiums and a library of different policies to choose from. So let’s break down the cost of health insurance for seniors, as well as how to choose the best policy for your particular needs.

Key Takeaways

  • Seniors are more likely to need treatments like joint replacements and cataract surgeries, and private health insurance means you’ll get shorter waiting times and your choice of doctor or specialist.
  • The cost of health insurance for seniors will depend on multiple factors, but seniors can save by choosing a higher excess and taking advantage of the private health insurance rebate.
  • Choosing a policy that includes hospital treatments, rehabilitation and allied health services will give seniors the care they need while minimising out-of-pocket expenses.
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Why seniors need health insurance more than most

While Medicare covers all the essential healthcare services, it does have its limitations, especially when it comes to elective surgeries, dental care and using other common specialists like physiotherapy and getting glasses. For seniors, these ‘gaps’ in cover can be a big problem, as they are more likely to need treatments like joint replacements and cataract surgery.

In terms of benefits for you, having private health insurance means you can take advantage of:

  • Private hospitals: Shorter waiting times and the ability to choose your preferred specialist.
  • Specialised services: Cover for services like physiotherapy, podiatry and optical, which are necessary for staying mobile and active in your golden years.
  • Tax benefits: Avoiding the Medicare Levy Surcharge (MLS) for higher-income seniors.

What impacts the cost of seniors health insurance?

It will ultimately depend on a few different factors – such as the level of cover (Gold, Silver, Bronze or Basic), your age, any pre-existing conditions you might have, as well as your specific health needs and what you expect you might need in the future. Here’s what you need to ask yourself while comparing policies:

1. How much cover do I actually need?

Health insurance policies are, for most health insurers, split into four tiers: Basic, Bronze, Silver and Gold. There are sometimes ‘plus’ sub-categories, such as Silver Plus, which will give you more benefits than a standard Silver policy but with lower premiums than a Gold policy.

  • Basic and Bronze tiers: You’ll get limited coverage and your policy might exclude essential services for seniors (e.g. joint replacements). While they have lower premiums, the out-of-pocket costs for treatments that aren’t covered can be eye-watering.
  • Silver and Gold tiers: These policies give you the most comprehensive cover, including services that are very commonly needed by seniors. However, you’ll also need to fork out for higher premiums.

2. Do I also want extras cover?

Extras cover can help with cost for non-hospital treatments – think dental, optical and physiotherapy. If you plan on using these services frequently, it might be worth bundling them into combined hospital and extras cover.

3. Am I entitled to any government rebates?

The Australian Government has set up a private health insurance rebate to help offset costs, with higher rebate percentages for seniors:

  • Up to 28.710% for those aged 65–69
  • Up to 32.812% for those aged 70 and over


Be aware that the rebate is income-tested, which means it decreases as your taxable income increases. Seniors earning less than $97,000 annually (or couples earning under $194,000) qualify for the full rebate.

4. What are my pre-existing conditions (if any)?

A large portion of seniors have pre-existing conditions, which health funds are obligated to cover after a 12-month waiting period. While these conditions won’t directly increase your premiums, they can affect when claims can be made for certain treatments. Always read the PDS and speak to your provider if you’re unsure how pre-existing conditions might impact your cover.

Portability

Don’t re-serve waiting periods when you switch to a new health fund or policy

“John was immediately covered for a hip replacement in private hospital because he had already served his waiting periods for joint replacements on his old policy”

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Average cost of health insurance for seniors

The price range for private health insurance is vast, as it will depend on things like where you live and the type of cover you want. Still, it’s worth knowing some general figures so you can decide whether you can afford to get private health insurance.

If you’re looking for a single hospital and extras policy, the average female in New South Wales will pay monthly premiums of anywhere from $67.15 for the most basic policy, up to $277.41 for comprehensive cover. Be aware that this price could be higher for certain insurers.

Out-of-pocket expenses are another consideration. On average, Australian seniors spend over $1,500 every year on their healthcare costs that aren’t covered by insurance. This could be anything from specialist consultations to high-cost dental procedures. 

Bottom line? It pays to compare your options and pick a policy that will give you the greatest financial protection for what you need.

How to save on health insurance as a senior

First, go over your current policy to make sure it’s still meeting your current needs. For example, if you’re no longer planning to have kids, you might be able to switch to a lower-tier policy that doesn’t include pregnancy and fertility services, which can reduce your premiums. Conversely, you might want to jump up to a higher tier if you expect you’ll need treatments like joint replacements and cardiac procedures in the coming years.

You can also choose a higher excess to reduce your monthly premiums. For seniors who rarely – if ever – need hospital care, this can be a cost-effective option. The current maximum excess is $750 for singles and $1,500 for couples or families.

Last but certainly not least, compare different policies before settling on one. Not all insurers offer the same benefits at the same price. Comparing policies across multiple providers is the best way to find a great deal. Look for policies that waive excess for day surgeries or include perks like wellness programs and gym memberships. And by the same token, make sure you’re taking full advantage of the government’s rebate program – check your income and age bracket to see how much you are eligible for.

What services should seniors prioritise?

  • Hospital treatments: Cover for joint replacements, cataract surgeries, cardiac procedures and cancer treatments.
  • Rehabilitation services: Programs that help you recover from surgeries and injuries.
  • Dental and optical: Regular dental check-ups and eyewear are important for millions of senior Aussies who want to maintain their quality of life.
  • Preventive health services: Screenings, vaccinations and wellness programs to detect and prevent various health issues.
  • Allied health services: Cover for physiotherapy, podiatry and chiropractic care to stay mobile and manage any chronic conditions.

Is health insurance worth it for seniors?

For many seniors, the decision of whether to take out private health insurance comes down to weighing up the costs and the benefits. While Medicare does cover the essentials, the long waiting times for elective surgeries and having very limited access to allied health services make private health insurance an attractive option.

Seniors also tend to use their health insurance more regularly than younger age groups. Plus, higher rebates and policies specifically designed for older Australians means you can get private cover that’s both affordable and all-encompassing.

Fair Health Care Alliance is committed to helping seniors get the private health insurance they deserve. Start reviewing your options and comparing health insurance policies today so you can protect your lifestyle – now, and into your golden years.

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What you should know about the cost of seniors health insurance

Founder at Fair Healthcare Alliance

Aaron Savrone, founder of Fair Health Care Alliance (FHCA), is a health insurance expert with over 15 years of experience. Specializing in transparent, customer-focused advice, Aaron launched FHCA in 2017 to address the lack of genuine care in the health insurance comparison space. With a commitment to simplifying complex policies and data, Aaron and the team have earned FHCA top ratings and awards, including a 5-star Google Review score from hundreds of reviews and winner of the Best Insurance Comparison Website by ProductReview 3 years in a row (2023, 2024, 2025).

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