If you need to see a doctor or have medical tests regularly you could end up with high medical costs. The Medicare Safety Net is designed to provide additional financial relief for people with high medical costs by reducing their out-of-pocket costs.
When an individual or family receives many services in a year the Medicare Safety Net reduces their out-of-pocket costs for services received out-of-hospital.
How does the Medicare Safety Net work?
When an individual or a family’s ‘gap’ payments exceed a certain threshold amount in a calendar year, 100% of the Medicare Benefits Schedule (MBS) fee for out-of-hospital services is reimbursed through Medicare. However, this is not necessarily 100% of the out-of-pocket costs as the treatment fee may be higher than the schedule fee which means there will still be an out-of-pocket cost.
The 2010 Medicare Safety Net threshold for families and individuals is $388.80. The threshold amount is indexed by Consumer Price Index on 1 January each year.
Example
Natalie is concerned about a mole on her leg that has changed shape and decides to see a dermatologist. The MBS fee for the consultation is $180, but her dermatologist charges $250. As she is seeing a specialist her standard Medicare benefit is 85% of the MBS fee, totalling $153. However, Natalie has reached her Medicare Safety Net threshold for the year so she will receive 100% of the MBS fee back from Medicare, totalling $180. Natalie’s out-of-pocket cost will be the difference between the MBS fee and the amount her doctor charges, totalling $70.
What is the Extended Medicare Safety Net?
When an individual or a family’s out-of-pocket costs exceed a certain threshold amount in a calendar year, 80% of out-of-pocket costs incurred through the use of out-of-hospital services is paid through the Extended Medicare Safety Net for the rest of the calendar year.
The 2010 Extended Medicare Safety Net threshold for families and individuals is $1,126.00. The threshold for concession cardholders and people who receive Family Tax Benefits (Part A) is $562.90. The threshold amounts are indexed by Consumer Price Index on 1 January each year.
Please note a limit to the amount of benefit that will be paid applies to some services effective 1 January 2010, for more information click here.
Example
Adam hasn’t been feeling well and has decided to visit his GP for an examination. The MBS fee for the visit is $35, and he is entitled to 100% benefit through the MBS. Adam’s doctor charges $60, leaving him $25 out-of-pocket. However, Adam has reached his Extended Medicare Safety Net threshold for the year which means 80% of his out-of-pocket cost will be covered under the Extended Medicare Safety Net, reducing his out-of-pocket cost to $5.
What services count toward the Safety Net thresholds?
The Medicare Safety Net covers a range of doctor visits and tests that you receive out-of-hospital.
Some examples of services that count towards the Safety Net are:
- GP and specialist consultations
- Ultrasounds
- Pap tests
- Blood tests
- CT Scans
- X-rays
What services do not count toward the Safety Net?
Medical services that are not covered by Medicare and in-hospital services are not included in the Safety Net. For example, having surgery, seeing a doctor or having a test when you are admitted to hospital are not included.
Changes to the Extended Medicare Safety Net effective 1 January 2010
A limit to the amount of benefit that will be paid under the Extended Medicare Safety Net applies to some services effective 1 January 2010, for more information click here.
For more information about the Medicare Safety Net visit the Medicare Australia website or call Medicare on 132 011.