Manage health costs in retirement

Good health makes a big difference on how you enjoy your retirement. It also impacts your retirement costs.

If you have health needs, accessing public health care and eligible subsidies can help you manage the costs.

Medicare guarantees access to a wide range of health and hospital services at low or no cost – and concession cards can help with day-to-day health costs.

But retirees can still face out-of-pocket expenses. Knowing what’s covered, and what you may have to pay for, can help you plan.

Ways to manage health costs in retirement

While illness can affect anyone, maintaining your physical, mental and social wellbeing can help you get more out of life – whatever health challenges you may face.

Managing your health may include:

• regularly getting health checks and prioritising preventive care to catch issues early
• keeping an emergency fund for potential out-of-pocket medical expenses
• staying connected with friends and family
• eating a balanced diet and exercising regularly in ways that work for you
• seeking help if you’re not coping or are having trouble managing health costs

What you can do to help manage health costs

Talk to your doctor about:

• Referring you to public health services – this can reduce or eliminate specialist costs.
• Choosing to be treated as a public patient in a public hospital, to reduce costs payable for your treatment.
• If cost is a barrier to treatment, ask if they are willing to reduce their fee.
• If you are eligible for a long term or indefinite referral.
• Access to free:
  
  • vaccinations — free vaccinations for flu, shingles and pneumococcal disease.
  • cancer screenings — free early detection screenings for breast cancer and bowel cancer.
  • annual health assessment — if you're 75 or over (or 55 for Aboriginal and Torres Strait Islander peoples). If your doctor doesn't bulk bill, you may have to pay the gap.
  • home medication review — help with using medicines at home if you use more than 5 medications per day. Ask your GP or pharmacist.

You can also:

• Compare the costs of health providers if you are paying privately.
• If you have health insurance, review your policy to ensure it covers your changing needs and you’re getting the best deal.
• Check if you’re eligible for healthcare cards and concessions.

What medical services cost

Medicare cover for basic health services

Medicare covers many basic health services, but you may still need to pay extra depending on the service and your provider.

• GP visits: Free if your doctor chooses to bulk bill. If not, visiting a GP comes with an average gap payment of around $40-50 per visit. Find a doctor who bulk bills.
• Specialist consultations: Medicare covers 85% of the schedule fee for seeing a specialist. But specialists often charge more than schedule, and out-of-pocket costs are typically $80 to more than $100 per visit.
• Allied health: Medicare subsidises health services like physiotherapy, podiatry or seeing a dietitian if your GP sets up a chronic condition care plan. You may still have to pay if your provider charges more than the Medicare rebate.

Hospital stays

Public hospital care is free if you have a Medicare card and are admitted as a public patient. You don’t need private health insurance, and you won’t be charged for your stay, surgery or medical tests.

If you want to be treated as a private patient, or choose your doctor and timing, you’ll need private hospital insurance. This can come with extra costs and specialist gap fees, which vary depending on your policy. There may also be upper age limits for new policies.

Medications

Most prescription medicines in Australia are subsidised by the Pharmaceutical Benefits Scheme (PBS). This means the price you pay is capped for each medicine.

Once you spend enough on PBS medicines, you can apply for a PBS Safety Net Card, which makes additional scripts even cheaper or free.

A Pensioner Concession Card can also reduce the cost of medicines and lower the Safety Net threshold.

On 1 January 2025, the government introduced a freeze on the maximum patient cost for all PBS medicines. This means the price you pay for each medicine is the same as it was in 2024 and will not increase in 2025. The freeze is for one year for general patients who hold a Medicare card, and 5 years for pensioners and concession card holders. Read more about cheaper medicines.

Teeth, eyes and hearing

Many older Australians have ongoing dental, vision and hearing needs – but these services are not always fully covered by Medicare and often come with out-of-pocket costs.

• Dental: Medicare doesn’t cover regular dental care for adults. Some people are eligible for free or subsidised dental services, but there are waiting times and services are limited.
• Vision: Medicare covers eye tests but does not cover the costs of glasses or contact lenses. If you cannot afford glasses, there are state government schemes that can help.
• Hearing: Hearing loss is common as you age. The Hearing Services Program covers some or all of the costs of hearing aids for concession card holders and others eligible.

Find out more about support from other government programs.

Mental health costs

Medicare covers mental health appointments with GPs if they bulk bill and can help with the cost of a psychologist or other mental health professional. Mental health professionals set their own fees, so there may be a gap to pay.

Mental health support is also available through Medicare Mental Health Centres. These services are free, confidential and do not require a Medicare card. Call 1800 595 212 or visit Medicare Mental Health for more information.

Private health insurance

Private health insurance can help cover medical expenses not covered by Medicare like the costs of ambulances, hearing aids and glasses.

It can also give you more choice about your doctor and hospital and may allow you to be treated sooner as a private patient.

Private health insurers are not allowed to charge you more because you are older or retired. However, there may be upper age limits on new policies.

Find out more about the types of health insurance cover available.

Take time to plan ahead

If you are looking to plan ahead, you might also consider:

• making arrangements in case you experience memory loss or dementia
• ensuring your will and power of attorney are up to date
• paying ahead for funeral costs