Health Insurance for Seniors in Aged Care Homes
Neither Medicare nor private health funds cover aged care homes today. Certain hospital covers offer home nursing, which could be considered by seniors who either prefer home care or a hybrid of home care and residential nursing home. Aged care facilities often have registered nurses or clinicians to oversee the care provided to the senior residents and handle certain day-to-day medical needs. However, they do not (and should not) provide many of the assessments, treatments, or procedures hospitals do.
Residents will still need to access hospitals in case of emergencies or more serious illnesses. Hence, having a good hospitals cover policy is critical for seniors, whether they are being cared for at home or in residential nursing homes. Extras covers can also help reduce the cost of medicines and other helpful therapies to keep seniors healthy. Given that seniors spend about $1412 ($3528 for those with chronic conditions) on out-of-pocket health care costs, having a suitable level of coverage would be beneficial. Doing so also allows you to be exempt from the Medicare Levy Surcharge.
Costs of Aged Care Homes
There are 3 cost types related to aged care home services:
- Basic daily fee: A maximum daily fee ($52.25 per day) for hotel services which accommodate daily needs such as meals, laundry, facilities maintenance, etc.
- Accommodation costs: Payment for the room, the rates of which depends on your income
- Means-tested care fee: Additional payment dedicated to cover the cost of day-to-day care for those above certain income and asset thresholds
- Extra service fees: Fees for add-on or luxury services such as larger room, internet, etc.
Based on your financial situation, you have two types of aged care facilities to choose from - government-subsidised vs. private. The costs of government-subsidised facilities are more heavily regulated by the Australian Government which reviews the basic daily fee twice a year to assess fairness and affordability. This calculation is based on the Age Pension. The basic daily fee is set at 85% of the annual single basic Age Pension.
You see more variety in the private aged care homes. Some are residential nursing homes, some offer communities of living units without care services, and some are to accommodate specific needs. These facilities do not receive funding from the government and thus residents may not be entitled to certain government rebates.
For low-income seniors (below $27,840 with assets below $50,500), the government will cover the accommodation costs. In addition, negotiating with the aged care homes is definitely possible.