So you need to see a specialist: how much will it cost you?

Unfortunately there is no easy answer to how much having surgery will cost you. This is because some of the costs may be covered by Medicare, some of the costs may be covered by private health insurance (depending on your level of cover and their policies) and some doctors may charge an out of pocket cost. You may also need to pay a number of different people and organisations for surgery – this may include the specialist doctor performing the surgery, the anaesthetist, the surgical assistant, the hospital and any organisations conducting medical testing. This article aims to answer some of these questions. However it is your responsibility as a patient to talk with your doctors and health insurer to confirm the exact costs associated with your medical care.

The costs associated with seeing a specialist doctor and having an operation can be difficult to understand. What you’re covered for, in what circumstances you’re covered and how much of the bill is covered, are all questions this article aims to answer. This article is particularly relevant for those who have private health insurance.

What is Medicare?

Medicare is the Commonwealth Government’s universal health scheme that guarantees Australian citizens access to health services at little, or no cost. If you use health services in the public health system, Medicare subsidises your care. 1,If you access health services in the private health system, Medicare will subsidise your health care, but will not cover all of the costs. The additional costs may be covered by your private health insurer and you may also need to cover some of the costs.

What is the Medicare Benefits Schedule (MBS) rate?

This is the cost that the Government assigns to a medical service. The health care provider that provides you with the service can claim this amount back from the Government as a rebate – this means that the Government is paying the health care provider for performing the service, rather than you as the patient. Medicare will cover all of the MBS rate if you are accessing health services in the public health system, but will only pay some of the MBS rate if you access health services in the private health system.3

For patients with private health insurance who access health services in the private health system, Medicare pays a benefit of4:
  • 75% of the MBS rate of services you access while admitted in a private hospital (private in-hospital treatment)
  • 85% of the MBS rate of services you access out of hospital, such as a private consultation
  • If your health care provider “bulk bills”, this means the health care provider will charge Medicare directly, and you will have no out of pocket expenses.

The amount that your private health insurer will pay for depends on the type of private health insurance cover you have.

What types of private health insurance cover exist in Australia?

There are two types of private health insurance: ‘hospital cover’ for when you’re admitted to hospital, and ‘ancillary’ or ‘extras cover’ which includes allied health services such as physiotherapy and podiatry.

Private health insurance hospital cover policies have four general categories. The more your policy covers, the more you pay your health insurance provider each year:
  1. Top Cover – The insurer must cover the costs of all services that are listed on the MBS.
  2. Medium Cover – This is similar to top cover, but some operations are not covered by your private health insurer. These include services such as pregnancy and birth related services, assisted reproduction, cataract and eye lens procedures, joint replacements, dialysis treatment and sterilisation procedures.
  3. Basic Cover – This level of cover excludes all of the services not covered by medium cover, along with additional health services. The additional health services not covered by your health insurer may include services such as cardiac operations and related services, non-cosmetic plastic surgery, rehabilitation, psychiatric services and palliative care services.
  4. Public Cover – this cover offers benefits for a restricted range of operations, where you can see a private specialist doctor in a public hospital setting.

Importantly, the above does not directly apply if you are insured with Bupa. Bupa will only cover higher Scheme benefits if you have surgery in a hospital and with a health care provider that Bupa has an agreement with. If you have surgery with a provider or in a hospital Bupa does not have an agreement with, they will only cover 25% of the MBS rate. You should always check with your health insurance company and health care provider before agreeing to any surgery.

Health insurance policies may also include an “excess” which you as the patient must pay your private health insurer to access your cover. For example, you may have to pay an “excess” of $500 to your private health insurer before they cover the costs of an operation. It is your responsibility as the patient to understand which operations and health services your insurer covers, not your specialist doctor. You should call your private health insurer to understand whether they will cover the care you require.

These private health insurance cover classifications do NOT apply to operations that Medicare does not pay a benefit for – if you require a procedure that is not listed on the MBS, you will have to pay the cost of the procedure.5

What is a ‘gap’ our ‘out of pocket cost’?

Doctors and health care providers are entitled to charge more than the MBS rate.If the doctor or health care provider charges above the MBS rate, this cost, if it is not covered by your private health insurer, is called the ‘gap’ or ‘out of pocket cost’ and must be paid by you.7 8 You should ask your health care provider if there are any out of pocket costs before you agree to their services.

What additional fees should you consider if you are having an operation or need further tests?

If you see a doctor and they determine you need an operation, you will most likely need to be admitted to a hospital or day surgery. There are likely to be additional fees that you
need to ensure you understand, beyond the fees of the doctor performing the operation. The potential fees include:
  • the anaesthetist
  • the surgical assistant
  • hospital accommodation/operating theatre fees (see this link for more
  • information: https://www.myhospitals.gov.au/search/hospitals)
  • surgical prostheses (the implants which may be used as part of your surgery e.g. hip replacement)
  • pathology and imaging (e.g. blood tests, MRI scans).9

Some of these services may charge more than the allocated MBS rate independent of your specialist doctor, which means your out of pocket cost may be more than your specialist doctor’s quoted out of pocket cost. You should ask what your hospital stay will cost you.

Below is an example of a patient called Christine who visits a general practitioner and specialist doctor and finds out she requires a knee operation. It outlines what costs she needs to consider and what rebates she can expect from Medicare and her private health insurer.

The table below provides an example of anticipated costs for Christine.

1 The Department of Health. “Out-of-pocket expenses for private medical treatment (Informed Financial Consent)” http://www.health.gov.au/internet/main/publishing.nsf/Content/health-privatehealth-outofpocket-expenses Last updated 8 March 2017. Accessed 15 April 2018.
2 Commonwealth Private Health Insurance Ombudsman. “Doctor’s bills” http://www.ombudsman.gov.au/__data/assets/pdf_file/0016/35611/Doctors-Bill-DL-Fyler-Web.pdf Accessed 15 April 2018.
3 The Department of Health. “Out-of-pocket expenses for private medical treatment (Informed Financial Consent)” http://www.health.gov.au/internet/main/publishing.nsf/Content/health-privatehealth-outofpocket-expenses Last updated 8 March 2017. Accessed 15 April 2018.
4 Commonwealth Private Health Insurance Ombudsman. “Doctor’s bills” http://www.ombudsman.gov.au/__data/assets/pdf_file/0016/35611/Doctors-Bill-DL-Fyler-Web.pdf Accessed 15 April 2018.
5 Australian Government: Private Health Insurance Ombudsman https://www.privatehealth.gov.au/healthinsurance/howitworks/
6 The Department of Health. “Out-of-pocket expenses for private medical treatment (Informed Financial Consent)” http://www.health.gov.au/internet/main/publishing.nsf/Content/health-privatehealth-outofpocket-expenses Last updated 8 March 2017. Accessed 15 April 2018.
7 The Department of Health. “Out-of-pocket expenses for private medical treatment (Informed Financial Consent)” http://www.health.gov.au/internet/main/publishing.nsf/Content/health-privatehealth-outofpocket-expenses Last updated 8 March 2017. Accessed 15 April 2018.
8 Australian Government: Private Health Insurance Ombudsman https://www.privatehealth.gov.au/healthinsurance/howitworks/
9 Australian Government: Private Health Insurance Ombudsman https://www.privatehealth.gov.au/healthinsurance/whatiscovered/