Private Health Insurance

If you have private health insurance (PHI), you need to consider what it covers before you see the Specialist or while you are choosing where and when to have the procedure performed.

Under Medicare your policy does not cover visits to consultations in your Specialist’s rooms or tests ordered during these consultations. 

It covers some or all of the fees for services during admission to a hospital or day centres.

What Does your Policy Cover?

 What procedures – are there any exclusions in your policy?

 Is there an excess on your policy that you must pay the hospital?

 Is it sufficient to cover a private hospital or single room ?

 Does your policy include the gap arrangements your fund has with private Specialists?

Ring your fund and ask them if you are not sure.

The fund usually pays for the hospital or day centre costs and contributes to the fees that doctors charge for the procedure, including the surgeon, anaesthetist, surgical assistant and any test, pathology and imaging, that are ordered while you are in hospital.

PHI Fees to Specialists

The PHI normally pay the Specialist 100% of the Medicare benefit level for the surgery (and then they reclaim 75% from Medicare).

If they have a gap arrangement with the Specialist, they will pay an extra amount to the Specialist provided that the Specialist agrees to only charge the patient a set limit of Out of Pocket costs.

The two common  arrangements are as follows:

  • NO GAP Scheme - the Specialist agrees to charge only the fee paid by the health fund
  • KNOWN GAP Scheme- the Specialist agrees to charge the patient out of pocket costs that do not exceed a capped amount set by the PHI.(eg $500) .  The PHI will then pay the Specialist an agreed amount which varies for each procedure and the Doctor charges the patient only the agreed amount of out of pocket costs.


PHI Does Not Cover:

BOOKING FEES: Some Specialists charge the patient an upfront fee or booking fee ( the name can vary but it is paid before the procedure is done ). The PHI funds do not reimburse them.

OUT OF POCKET Costs: some Specialists charge fees in addition to those paid by PHI. These need to be paid by the patient.

Some Specialists send a bill to the PHI and a separate bill to the patient for Out of Pocket costs that the patient must pay. Your PHI is usually not aware of these and if advised about these extra costs, may reduce the amount paid to the Specialist under the known gap arrangement .

Funds will often explain to their members that if the Specialist has a gap agreement with them, then Out of Pocket costs will be zero or small. However, these arrangements are not truly binding and are often not applied to patients. Booking fees and other Out of Pocket costs are not covered and the funds have no  knowledge of them.

The only way to find out what the Out of Pocket costs are likely to be is to ask the specialist's rooms what the costs will be and whether there will be other doctors also charging out of pocket costs.

The Specialist will usually give a written quote for his/her services but it often difficult  to find out what the other doctors will charge in advance. These other doctors include an anaesthetist, a surgical assistant, a pathologist, a radiologist etc.

Further information can be obtained from the facts sheets on the Private Health Ombudsman's site..