The Medicare Safety Net can reduce your out-of-pocket expenses
Under normal circumstances, Medicare only covers a portion of the costs related to outpatient treatments and procedures - leaving you responsible for the rest. These costs can really pile up, especially if you have an ongoing health condition that requires lots of tests, like diabetes or even pregnancy.
Luckily, the Medicare Safety Net (MSN) kicks in if these out-of-pocket expenses reach a certain level called your MSN threshold. From that point until the end of the year, your outpatient Medicare benefits will increase - ultimately lowering your out-of-pocket costs.
Why do you have to pay out-of-pocket expenses?
Medicare keeps a list of all the treatments it covers and the price it’s willing to pay for them in a public hospital. That set price is called the Medicare Benefits Schedule fee (or MBS fee).
When you are treated in a non-hospital setting, like when you get bloodwork and ultrasounds, Medicare only pays 85% of the MBS fee. That means you are responsible for the extra 15%, or the gap.
There may even be a second gap. This is the amount the doctor chooses to charge over and above the MBS fee.
How does the MSN work?
Medicare automatically tracks all the gap payments you make throughout the calendar year and when they reach a certain point, known as your threshold, additional cover will automatically kick-in on all on future out-of-hospital treatments.
In fact, there are two thresholds and each time you reach one, you trigger a separate safety net benefit with increasing levels of cover.
Medicare Safety Net 2018 thresholds and benefits
The following table lists both of the safety nets, what their thresholds are and what benefits they offer as of 2018:
|Threshold amount||What counts toward your threshold?||What happens when you reach your threshold?|
|Original Medicare Safety Net||$461.30||Only the 15% gap in the MBS fee (your doctor’s premiums don’t count).||Medicare will cover all future treatments for the rest of the year at 100% of the MBS fee (you’ll still be responsible for any doctor’s premiums)|
|Extended Medicare Safety Net||$2,093.30|
(or $668.10 for concession card holders and those who receive Family Tax Benefit Part A)
|All out-of-pocket expenses including your doctor’s premiums||Medicare will cover 80% of all remaining out-of-pocket costs (including your doctor’s premiums) for the rest of the year.|
However, some treatments have a benefit cap. If actual cost of the treatment exceeds the cap, you’ll get the cap amount instead of the 80%
What can you claim on the Medicare Safety Net?
The Medicare Safety Net covers a wide range of out-of-hospital doctor visits and medical tests listed on the Medicare Benefits Schedule. This includes:
- Consultations with your GP or healthcare professional
- Blood tests
- CT scans
- Pap smears
- Psychiatry services
- Tissue biopsies
- X-rays and ultrasounds
Out-of-hospital medical services that are not listed in the Medicare Benefits Schedule do not count towards the Medicare Safety Net.
What is the Family Safety Net?
Families, married couples and couples in defacto relationships can register to have their family unit given the same thresholds as a single person would have, but with their out-of-pocket expenses being tallied together. That means you’ll reach your thresholds faster and get your additional benefits sooner.
You’re not automatically registered for this even if your whole family is already on the same Medicare card. You have to take the separate step of filling out the Medicare Safety Net Registration and Amendment for Couples and Families.
What does MSN threshold reached mean?
You’ve reached your threshold and are eligible for additional benefits for the rest of the calendar year when your total out-of-pocket expenses for outpatient treatments add up to a specific dollar amount called the Medicare Safety Net Threshold.
How does the MSN work for IVF and pregnancy?
There are a handful of treatments where Medicare might not pay the 80% out-of-pocket expenses usually available under the Extended Medicare Safety Net. Many of these are treatments related to IVF and pregnancy.
These treatments have caps called EMSN benefit caps. If you’ve already reached your EMSN threshold and need one of these treatments, Medicare will pay the 80% or the EMSN benefit cap, whichever is lower.
They do it this way because before the caps, doctors in these areas of practice were charging outrageous premiums to take advantage of Medicare’s generous 80% contribution. Doctors can’t get away with this as easily now that the caps are in place.
Can you get a safety net rebate?
Yes. Medicare’s share of the cost comes in the form of a rebate paid to your bank account. So you will have to pay the full cost of the treatment and then lodge a claim with Medicare to get your rebate.
Here’s how you can claim:
- Automatically through your provider. The easiest way to claim is through the clinic where you had your treatment. You’ll pay for your treatment out of your own pocket, then the doctor will swipe your Medicare card and your debit card. The refund will go into the bank account linked to the debit card.
- Manually. You can also submit the claim through the Express Plus Mobile app, by post, on the phone or at a local Medicare service centre. You’ll need to have your Medicare card, your bank account details and your provider’s receipt.
What is the new Medicare Safety Net?
The new Medicare Safety Net, which was announced in the 2014-15 Federal Budget but is yet to be introduced, will provide further assistance for patients with high medical costs. The new Medicare Safety Net will replace the existing safety net arrangements and increase the Medicare benefit amount payable once you have reached the annual threshold for eligible out-of-pocket medical expenses.
However, the new arrangements will impose a limit on the out-of-pocket costs that count towards reaching the Medicare Safety Net threshold. As a result, the maximum accumulation amount per medical service will be 150% of the Medicare Benefits Schedule (MBS) fee minus the Medicare rebate. Any out-of-pocket costs you incur beyond this 150% limit won’t be counted when assessing whether you have reached the threshold.
Once the new Medicare Safety Net commences, the new thresholds will be as follows:
- $400 for singles and families with Commonwealth concession cards
- $700 for families who qualify for Family Tax Benefit Part (A), and single people without concession cards
- $1,000 for all other couples and families
Once a patient reaches the relevant threshold for medical costs, Medicare will pay a maximum of 80% of any out-of-pocket costs for out-of-hospital services that patient incurs for the rest of the calendar year. However, the maximum benefit (the MBS benefit plus the Medicare Safety Net benefit) the patient receives cannot exceed 150% of the MBS fee.
At the time of writing, no date had been set for the introduction of the new Medicare Safety Net. However, if you’ve registered for the previous Medicare Safety Net, there is no need to re-register in order to access benefits under the new Medicare Safety Net arrangements.