Health of Senior Australians & Out-of-Pocket Healthcare Costs They Face

Cost of living pressures remain an ongoing issue for senior Australians. In 2011, the Productive Ageing Centre commissioned a report from Simon Kelly, which showed nearly three-quarters of a million older households (aged 50 years and over) are spending half their income on just three essential cost of living items (groceries; electricity & gas; and healthcare) on an average income of just over $14,000 per year.

These commodity items were shown to be rising at a rate considerably faster than inflation. In 2011, a further report by the Productive Ageing Centre showed that 65% of mature age people (aged 50-79) did not purchase health insurance because they simply could not afford it. Earlier this year, we also documented that a significant number of older Australians faced affordability barriers with regards to access to Pharmaceutical medicines. 

This report, authored by researchers from the Australian National University, sought to examine the prevalence of chronic conditions among mature age people and how this relates to burdensome out-of-pocket health care costs. Results show that 570,000 people aged 55 years and over spend more than 10% of their income on health and about 250,000 spend over 20%. 

On average older Australians spend $353 per quarter on out-of-pocket health care costs. Worryingly, those with five of more chronic conditions spend $882 per quarter which is almost 6 times as much as those with no chronic conditions. For those with many chronic conditions this burden is magnified as they tend to have lower incomes, and those with five or more chronic conditions are estimated to spend 16.3% of their incomes on health care costs, while those with no chronic conditions spend only 1.9% of their incomes. 

As suggested in this report, there are numerous policy options to consider, including a wider safety net for those with multiple conditions or targeted programs for lower income earners with multiple conditions, similar to current DVA arrangements. But, as the authors point out, the only long run solution is to implement programs to prevent the prevalence of multiple chronic conditions. 

The evidence of cost of living pressures facing mature age Australians is certainly mounting. The extent to which these pressures are impinging upon healthy and productive ageing will continue to be a topic of research for the Productive Ageing Centre over the coming year.

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