Out of pocket expenses (gap cover)

A 'gap' is the difference between the amount you pay for medical and/or hospital charges, and your rebate from Medicare and/or your private health insurer. Some health insurers have gap cover arrangements with particular providers to insure against some or all of these additional payments.

Before you go to hospital, whenever practicable, you should ask the hospital, your doctors and your health insurer to find out exactly what is covered on your policy and what you will need to pay for yourself.

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A 'gap' is the difference between the amount you pay for medical and/or hospital charges, and your rebate from Medicare and/or your private health insurer. Some health insurers have gap cover arrangements with particular providers to insure against some or all of these additional payments.

Hospital gaps

Many private hospitals have arrangements with health insurers to fully or partially cover costs relating to hospital fees including accommodation, theatre, and labour ward fees. If you go to a hospital that does not have an agreement with your health insurer, you may face significant out-of-pocket expenses for your treatment.

If your hospital policy has an excess or co-payment, you have to pay the agreed excess or co-payment amount for hospital treatment out of your own pocket, even if your hospital has an agreement with your insurer. 

Before you go to hospital, you should ask the hospital and your health insurer to find out exactly what is covered with your policy, and what you will need to pay for yourself. For more information, see the Ombudsman's factsheet on Informed Financial Consent.

If you do not have hospital cover for a particular condition or medical service, you cannot claim the fees associated with your hospital stay for that treatment.

Excess and co-payment

  • An excess is the set amount that you are obliged to pay towards the cost of hospital treatment, in exchange for lower premiums. You, and anyone else listed on your hospital policy, may be required to pay an excess every time you go to hospital, or less often, depending on your policy. 
  • A co-payment is the set amount you are obliged to pay for each day you are in hospital, in exchange for lower premiums. For example, you, and anyone else listed on your hospital policy, may be required to pay the first $50 per day in hospital, depending on your policy.

Medical gaps

The Government sets the Medicare Benefits Schedule (MBS) fee for medical services lists in the MBS. However, the Government does not set the actual fees charged by medical service providers. Doctors are free to charge more than the MBS fee. You may have out-of-pocket expenses related to medical services provided during your hospital stay, for example - gaps from diagnostic imaging, radiology, pathology and pharmaceuticals.

When you are a private patient in hospital, Medicare will cover 75% of the MBS fee for associated medical costs. If you have hospital cover for your medical procedure, your health insurer will cover the remaining 25% of the MBS fee.

Gaps for doctors' fees come about when your specialist, surgeon, anaesthetist, and/or other doctors involved in your hospital care, charge more than the MBS fee. 

  • Some health insurers have gap cover doctors agreements made with particular doctors. The agreement may cover some or all of the doctors' fees for your in-patient hospital treatment. 
  • Doctors are free to decide on a case-by-case basis whether to use an insurer's gap cover arrangement. You should check with your doctor and insurer whether you can be treated under this scheme.
  • If you cannot be treated under a gap cover arrangement, you will have to contribute towards the doctor's bill out of your own pocket, for the amount that is billed over and above the MBS fee.
  • Before you go to hospital, you should ask your doctor for the MBS item numbers for the services they will perform and an estimate of your out-of-pocket costs. You should also ask the doctor if there will other doctors involved in your care (e.g. anaesthetist, assistant surgeon) and how you can get an estimate of their fees. 
  • Before you go to hospital, you should also check with your health insurer to find out exactly how much is covered on your hospital policy for that procedure.
  • Not all medical services are listed in the MBS. You should check with your doctor and your insurer whether your medical treatment is listed in the MBS. If it is not listed, you may face significant out-of-pocket expenses for your treatment.

For more information, see the Ombudsman's factsheet on Informed Financial Consent.

Medical Costs Finder

To help you find out more about the cost of specialist medical services, the Department of Health has introduced the Medical Costs Finder.

The Medical Costs Finder is an online tool that you can use to:
  • see how much people have paid out of pocket for a procedure
  • compare the costs estimated by your specialists and other health providers for a hospital procedure with the typical costs for the procedure in your area.
This helps you better understand what is typically paid and whether your likely out of pocket costs are high or low, compared with what others have paid for the treatment.

Prostheses

A prosthesis is an artificial substitute or replacement for a body part attached or applied to the body to replace a missing party. Surgically implanted prostheses are sometimes required, such as a replacement cornea, a hip joint replacement device, a pacemaker, or a heart valve.

  • If you are having surgery to implant or apply a prosthesis, your private health insurer must pay a benefit if you have the correct hospital cover and the product is on the Prostheses List. If you are covered, your health insurer will pay at least the minimum benefit listed on the Protheses List.
  • If the minimum benefit does not cover the cost of the prosthesis, uou might need to pay all or part of the gap to the hospital.
  • Before you have surgery, you should ask your health insurer if you are covered, how much your policy will pay for a particular prosthesis, and whether you will have any 'gap' to pay for the prosthesis.
  • Before you have surgery, you should also ask your doctor if the prosthesis is on the Prostheses List. If it is not on the list, you should ask your doctor if there is a prosthesis on the list that can be used instead. You should ask your doctor if you will have any 'gap' to pay for the prosthesis.
  • Before you have surgery, you should ask your hospital if you will have any 'gap' to pay for the prosthesis.
  • Devices such as external limb prosthetics, external breast prostheses and implants used solely for cosmetic purposes are not on the Prostheses List.