Have Private Health Insurance but Still Paid $2,000? The 'Gap Cover' Trap & How to Fix It
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| Have Private Health Insurance but Still Paid $2,000? |
You pay your Private Health Insurance premiums faithfully every month. You need knee surgery, so you book a specialist, assuming your insurer will pick up the tab.
The surgery goes well, but a week later, you receive a bill from the surgeon for $3,000.
You call your insurer in a panic. They calmly reply: "We paid the Medicare Schedule Fee. The doctor charged above that rate. You have to pay the 'Gap'."
This is the Medical Gap, and if you don't ask the right questions before surgery, it can bankrupt you.
Why Is There a Gap? (The Schedule Fee)
In Australia, the government sets a standard price for every medical procedure, called the MBS (Medicare Benefits Schedule) Fee.
However, doctors in Australia are private business owners. They are legally allowed to charge whatever they want.
💸 The Math of the Gap (Example)
Let's say the MBS fee for a procedure is $1,000.
- Medicare pays: 75% ($750).
- Your Insurer pays: 25% ($250).
- Total Coverage (MBS Fee): $1,000.
But the Surgeon charges: $3,000.
The Gap (Your Bill): $3,000 - $1,000 = $2,000. (You pay this out of pocket!)
The Solution: "Gap Cover" Schemes
To stop customers from cancelling their policies in anger, Health Funds created "Gap Cover" schemes. They make deals with doctors to pay them a bit more, provided the doctor limits what they charge you.
| Scheme Type | What It Means | Your Cost |
|---|---|---|
| No Gap | The doctor agrees to charge only what the insurer pays. | $0 |
| Known Gap | The doctor charges a fixed, lower gap amount (usually capped at $500). | max $500 |
| No Agreement | The doctor refuses the insurer's rates and charges full market price. | Unlimited (Thousands) |
The Golden Rule: Informed Financial Consent
You have a legal right to know the cost before you go into the operating theatre. This is called "Informed Financial Consent."
Do not be shy. When you first meet the specialist, ask these exact questions:
- "Do you participate in my health fund's 'No Gap' or 'Known Gap' scheme?"
- "Will there be any out-of-pocket costs for me?"
- "Can you provide a written quote for the surgery, including the anaesthetist and assistant surgeon?"
Note: Don't forget the Anaesthetist and the Assistant Surgeon! They bill separately and often have their own unexpected gaps.
What If the Doctor Says No?
If your surgeon doesn't participate in Gap Cover and quotes you a $2,000 gap, you have choices:
- Negotiate: Ask if they can reduce the fee or bill under the "Known Gap" scheme due to financial hardship.
- Switch Doctors: Ask your GP to refer you to a specialist who does use your insurer's Gap Cover scheme. You are the customer; you can shop around.
Chief Editor’s Verdict
A good health insurance policy isn't enough; you need a cooperative doctor.
Always check the "Access Gap Cover" (or Medical Cost Finder) list on your insurer's website before booking a specialist. Paying $2,000 for a surgery that could have been free (with a different doctor) is a painful mistake you don't want to make.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute financial or medical advice. Medical costs, MBS fees, and Gap Cover schemes vary by doctor, insurer, and procedure. Always obtain a written 'Informed Financial Consent' document from your specialist before proceeding with any treatment.
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