Carers: Paying For & Organising Your Hip or Knee Replacement
© Danielle Robertson Consulting Pty Ltd t/as DR Care Solutions
Given the number of times we hear of hip and knee replacements, it may come as no surprise that the highest burden of non-fatal disease in Australia, for both men and women, is musculoskeletal problems, with women holding a slightly higher share of this burden.
Day-to-day I see this statistic play out when called upon to advise on care support. The carer partner, often female, is suffering enormous pain and losing mobility and is in dire need of a hip or knee replacement.
They are hesitant to go ahead with the operation on two counts. Firstly, they are concerned about the cost of the operation. Secondly they ask, "Who will care for my partner while I am in hospital?"
Clearly the carer needs the operation or they will come to the point where they need care themselves.
Paying for a replacement
If we take a hip replacement as an example, the average cost for the operation is around $26,350. There are two avenues - either to have the operation in the public or private hospital system.
If you go for the public hospital system, the operation is largely paid for by the government with you incurring out-of-pocket costs of between roughly $200 and $650. There are two main drawbacks. Your name goes on a wait list and you may be waiting for up to 12 months for your operation. You will not have the opportunity to choose your surgeon or the hospital.
If you choose the private hospital system, you pay a significantly larger amount but have choice on the surgeon and hospital, and will not have to wait as long. How much you pay depends on whether or not you have private health insurance.
If you have private health insurance, cover for joint reconstructions is mandatory on most policies, however, the excesses, cover limits, and maximum payable benefits may vary significantly by policy and product tier. One can expect minimum out-of-pocket expenses of around $1,000, depending on the complexity of the procedure.
If you do not have private health insurance, you pay the full amount ($26,350) and receive a small Medicare rebate for some of the fees of the surgeon and anaesthetist.
How do I self-fund a private hospital procedure?
There are options and it is advisable to speak to your surgeon about payment options.
Family Loans - Commonly, I see the adult children wishing to pay for the operation and, where the parent insists, a family loan is drawn up and the child is paid back when the parent's estate is distributed on death.
Superannuation - Where there are superannuation funds available and the person is not yet eligible to access their super, the person may apply, via the Australia Tax Office, for access to those funds on limited compassionate grounds.
Veterans - If the person is a former or current serving member of the Australian Defence Force, or a close family member, the Department of Veterans Affairs may provide support.
Home Equity - If the person owns their own home, equity release (ie: a reverse mortgage) may be an option. This option allows you to borrow money using the equity in your home as security. The minimum you can borrow is typically around $10,000. Interest rates are generally higher than standard interest rates.
When it comes to money management, it is advisable to speak with your accountant or financial planner. It is well worth the professional fee. Otherwise, contact the Centrelink's Older Australian's line on 132 300, between 8 am and 5 pm, Monday to Friday, for some initial direction.
Care support during hospitalisation
Government-subsidised respite care is available to your partner and post-hospital transition care is available to you through My Aged Care.
If you would like to be introduced to an aged care accredited financial advisor or seek care or support for your loved one while you are hospitalised and for yourself when discharged, please reach out to me, Danielle Robertson.
I welcome the opportunity to have a no obligation, complimentary discussion with you on how to set up the right care, support and assistance for you and/ or your loved one, at the right time and in the right place.
 Australian Institute of Health and Welfare [Australian Government]: Australian Burden of Disease Study: Impact & Causes of Illness & Death in Australia 2015 Summary
 Canstar: Hip Replacements & Your Hip Pocket; Some Of The Costs Explained
 ATO: Eligibility For Compassionate Release of Super
 Department of Veterans' Affairs [Australian Government]: Financial Support
 Money Smart: Reverse Mortgage & Home Equity Release
 Centrelink's Older Australians Line
 My Aged Care: Short-Term Care