What is the Gap?
In Australia, the Government publishes standard prices for
medical procedures under the Medicare Benefits Schedule (MBS). If
you have had treatment under the private health care
system Medicare pays 75% of the MBS fee when you undergo a
procedure in hospital, and your health fund pays the remaining
There is no requirement for doctors to charge the MBS, so a
health insurance gap occurs when you are treated by a doctor who
charges above the MBS. The difference between the MBS price (what
your health fund will generally cover) and your doctor's costs are
called 'the gap', and this is often payable out of your own
funds do offer gap cover, but usually this is only with their
highest level plans (most comprehensive
cover). Depending on your insurer you may even be able to
purchase additional gap cover on top of your regular health
How do I know if I'll have a gap to pay?
The Private Health Insurance Ombudsman has stated that 82% of
privately insured services in hospital are gap-free. This is great
news as it decreases the chances of your treatment incurring a
The best way to find out if you'll have a gap to pay for your
procedure is to ask for a list of all costs before the treatment.
It's called Informed Financial Consent and it is your right.
Some questions you should ask include:
- Does this hospital have an agreement with my health fund to
cover all my costs
- How much will my doctor/surgeon charge and will there be a gap
- Does my health fund cover the gap or will I be liable for that
- How can I avoid or minimise the gap?
You can avoid or minimise the gap by getting quotes from several
different medical professionals and selecting one that doesn't
charge above the MBS fee, or one whose gap cost you can afford.
Remember, the majority of your in-hospital treatment probably
won't incur a gap, but do ask questions before any procedure so you
won't have to worry about costs afterwards.
These articles are provided as reference material to allow more informed decision making, but are not intended as being a complete source of information on any topic. All readers should make their own independent analysis on the topic to make sure they have considered the aspects that are important to them.
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