Aged Care vs Health Insurance: What You Should Know

When it comes to preparing for the future, many Aussies get caught up in a common confusion — what’s the difference between aged care insurance and health insurance? Whether you’re in Adelaide, Sydney, or anywhere in between, understanding how these two types of cover work can help you (or your loved ones) plan better for later years.

Let’s break it down in simple terms so you know exactly what each offers — and when you might need one, the other, or both.

What Is Health Insurance in Australia?

Health insurance in Australia is pretty straightforward. It’s the cover you get for medical treatment — either through Medicare or by topping it up with private health insurance.

There are two main types of private health insurance:

• Hospital Cover: Helps with the costs of being treated in a private hospital.
  
  

• Extras Cover: Covers services like dental, physio, optical, and more.

As of 2024, over 55% of Australians had some form of private health insurance (APRA, 2024). It’s popular, especially for younger retirees or people with chronic health issues, because it gives you more choices and shorter wait times.

But — and this is important — health insurance doesn’t cover things like:

• Help with daily living
  
  

• Personal care
  
  

• Residential aged care facilities
  
  

• Home care support

That’s where aged care insurance adelaide comes in.

What Is Aged Care Insurance?

Aged care insurance — especially growing in demand in places like Adelaide and across South Australia — helps cover the costs of long-term aged care services. We're talking about help with daily activities like bathing, dressing, cooking, or support in aged care homes.

It can cover:

• Residential aged care fees
  
  

• In-home care services
  
  

• Respite care
  
  

• Dementia support programs
  
  

• Special equipment (like mobility aids)

The Royal Commission into Aged Care (2021) estimated that over 1.3 million Australians will require aged care services by 2025, and that number is rising fast.

Now, Australia’s government does subsidise a fair chunk through My Aged Care, but there are still significant out-of-pocket costs involved. This is where aged care insurance steps in to fill the gap.

Key Differences Between Aged Care & Health Insurance

Let’s compare apples with oranges for a second.

In short: health insurance keeps you well, while aged care insurance keeps you cared for.

Cost Breakdown: What’s More Expensive?

Here’s the kicker — both can be costly, but aged care adds up over time.

• Health insurance premiums for a 60-year-old couple can range from $300–$600 per month depending on cover level (Canstar, 2024).
  
  

• Residential aged care can cost upwards of $50,000–$100,000 per year depending on location and services (My Aged Care, 2023).

In Adelaide specifically, aged care accommodation payments can range from $350,000 to $700,000 as a refundable lump sum (RAD), or daily fees of $75–$150 if paid periodically.

That’s why more and more people are looking into aged care insurance in Adelaide — especially as private facilities become pricier and government places are harder to get into.

Government Support: Medicare vs My Aged Care

Here’s where many people mix things up.

Medicare gives you:

• Free or subsidised visits to doctors
  
  

• Free treatment in public hospitals
  
  

• Some medication costs covered

My Aged Care helps you:

• Access in-home care packages
  
  

• Get assessed for aged care needs
  
  

• Receive funding support for residential care

However, My Aged Care doesn’t cover everything. There’s still means-tested fees and accommodation costs, and many families get surprised by how much is still out of pocket.

When Do You Need Health Insurance?

Health insurance is ideal for:

• Avoiding long public waitlists
  
  

• Getting treatment in private hospitals
  
  

• Young seniors managing chronic conditions
  
  

• Families wanting full medical cover

It’s useful well before retirement — ideally in your 30s to 50s — when premiums are lower and you're less likely to be excluded due to pre-existing conditions.

When Do You Need Aged Care Insurance or Planning?

You might not think about it now, but aged care needs can sneak up on you. Some signs it might be time to explore options include:

• You or your partner needing assistance with daily activities
  
  

• A diagnosis of dementia or Parkinson’s
  
  

• Increased falls, memory loss, or medication reliance
  
  

• Loss of a spouse and reduced independence

People in Adelaide and regional SA often opt for home-based aged care first — and aged care insurance can help with nurse visits, mobility aids, and transport support.

Can You Have Both? Absolutely.

In fact, it’s wise to consider both types of cover, especially as you approach retirement.

• Health insurance takes care of immediate medical needs.
  
  

• Aged care insurance ensures long-term support is in place if your health or independence declines.

Some comprehensive life insurance plans offer add-ons or stand-alone aged care benefits — it’s worth reviewing your existing policy or speaking to a financial advisor.

Planning Financially: Why Adelaide Residents Should Think Ahead

Adelaide has an ageing population — by 2030, over 22% of South Australians will be aged 65 and over (ABS, 2023). That means more pressure on public care systems and longer waitlists.

By investing early in aged care insurance in Adelaide, you can:

• Choose preferred providers and facilities
  
  

• Avoid the panic of last-minute decisions
  
  

• Reduce financial burden on your family
  
  

• Get support to stay at home longer

Final Thoughts

Understanding the difference between aged care insurance and health insurance is more than just a technical detail — it’s a big part of ageing well in Australia.

If you’re in Adelaide or anywhere in South Australia, now’s the time to start thinking about:

• How well you’re covered today
  
  

• What your care needs might look like tomorrow
  
  

• And whether aged care insurance is the missing piece in your retirement puzzle

Being prepared doesn’t just give you peace of mind — it gives you control over how you live and age on your own terms.