How much is the Commonwealth Seniors Health Card worth?

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Introduction

The Commonwealth Seniors Health Card (CSHC) was introduced in 1994 to offer self-funded retirees access to the same Commonwealth health benefits as pensioners.

The CSHC allows the holder:

  1. Access to a lower Medicare Safety Net

  2. Access to the Pharmaceutical Benefits Scheme (PBS)

  3. Bulk-billed GP appointments at the discretion of the GP (the GP has financial incentives to bulk-bill concession card holders)

  4. Some other entitlements, depending on the state.

Nearly 380 000 Australians currently hold a Commonwealth Seniors Health Card (CSHC).

This compares to nearly 2.46m Australians who receive an Age Pension - and who have access to the same benefits as CSHC holders.

To be eligible for the CSHC you will need to:

  1. Be of age pension age (65.5, or 66 from July 2019)

  2. Meet an income test limit.

  3. Meet residency requirements

How much benefit this card will be to you depends on how much you use the services that are covered by Medicare and the PBS.

A good start to working this out may be to look at your Medicare Claims History Statement. On this statement you will see services you are using that have Medicare support. You will also be able to see the amount of “out-of-pocket” amounts you pay. If you are spending more than about $670 per year, the lower Medicare Safety Net offered to holders of the Commonwealth Seniors Health Card may be of value.

Also consider how much you are spending on medicines. A discussion with your chemist will help you understand how much you may save if you have access to the Pharmaceutical Benefits Scheme (PBS). You can also check if your medication is covered here.

Finally, check with some of your medical practitioners to see if they will bulk-bill you as a CSHC holder. They may have a financial incentive to do so.

So how much is it worth?

Pricing the exact benefit of a Commonwealth Seniors Health Card is going to depend on the individual use of Medicare and PBS Medicines.

In broad terms, consider that:

The Medicare Safety Net for CSHC kicks in at a lower level. Once out-of-pocket medical costs reach $680, Medicare will pay 80c in the dollar. For everyone else, this support happens when out-of-pocket spending gets above $2133. So CSHC holders will get an extra 80c back in the dollar for out-of-pocket expenses below $2133 and above $680. So there is a potential extra saving on out-of-pocket medical costs of $1,162.

For the Pharmaceutical Benefits Scheme, CSHC pay $6.50 for the first 60 PBS medications a year, and then medications are free. For everyone else, the rate is $40.30 per PBS medication, then the cost reduces to $6.50. For the purpose of this article, consider someone needing 5 PBS medications per month. A CSHC holder would have spent the limit of $390. Without this support, the PBS threshold kicks in at $1550.70, then scripts are $6.50. In this case the total cost is $1,690 - so the CSHC holder saves $1300.

Does the example above sound like you? Maybe your current health related spending means you will not benefit that much from the CSHC. However, this could easily change.

Australian Productivity Commission Data from 2013 shows Australians over 74 are receiving very high rates of support for PBS medications and Medicare support.

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So if you don’t see much benefit from the CSHC now, it is likely there is value in having the card in the future. And there may be other reasons for having the card.

It’s complicated, but worth having it

In the example above, a CSHC holder would save close to $2 500 per year on health care costs, and this does not take into account the potential to be bulk billed by GP.

In NSW the CSHC enables free Ambulance, and from July 1 2019, holders will be able to apply for an energy rebate of $200, and in regional areas, a travel card worth $250.

It’s all part of the challenge of keeping organised in later life.

We can help.

Brendan Ryan