Your first step is to break the link with your original O-A visa. Let your current visa expire. Leave Thailand and return on a tourist visa from a Thai consulate in either your country of passport or a near Thailand country. Once you return to Thailand start the process to apply for a retirement visa from you local Immigration Office. No medical insurance required but you will need to season 800,000 Thai baht..
Either way, you will not require health cover. Where will you apply in Australia. Some in Australia do not require to show banked money. Others in Australia do. In Thailand you would need to have 400,000 thb banked for at least 2 months before applying.
Deb Guy Lisa is correct. But you can now do a land border crossing and get 30 days more when you re enter Thailand. And then you can extend it at Immigration for 30 days more.
But if the Police/Immigration catch him on overstay (and they are known to patrol the airports randomly checking) then it would be jail, big fine and ban on reentry into Thailand in the future.