Paying for treatment

You have a right to know whether you will have to pay for treatment and medicines and, if so, what the costs will be. There may be fees you hadn’t considered (e.g. if you have surgery as a private patient, there will be fees for your stay in hospital and for the anaesthetist).

Your doctors and other health care providers must talk to you about likely out-of-pocket costs before treatment starts. This is called informed financial consent.

Learn more about:

• Private health insurance
• Medicare Benefits Schedule
  • Fees for services in hospital
  • Fees for out-of-hospital services
• Medicare Safety Net
• Ways to manage your costs

Many people treated privately are surprised that they have to pay additional costs not covered by Medicare or their health fund. It is important to ask about out-of-pocket costs before treatment.

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Private health insurance

Private health insurance is a contract between you and an insurance company (health fund) where you pay the company to help cover your future health care expenses. The amount you pay (the premium) and what is covered depends on your policy. You can choose to take out hospital cover as well as cover for extras such as dental, optical and physiotherapy treatments. There will usually be a waiting period after you take out a policy before you can claim benefits.

As a privately insured patient, you can choose your own doctor, and you can choose to be treated in a private hospital or as a private patient in a public hospital. You may have to pay some out-of-pocket costs. If you need help resolving a complaint with your health fund, the Commonwealth Ombudsman looks after private health insurance complaints and may be able to help.

Visit privatehealth.gov.au/health_insurance/what_is_covered for a detailed list of hospital, specialist and pharmaceutical services covered by Medicare and private health insurance.

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Medicare Benefits Schedule (MBS)

The Australian Government sets fees for the medical services it subsidises through Medicare. The Medicare Benefits Schedule (MBS) lists how much Medicare will pay for each subsidised service (known as the Schedule fee). Some doctors charge more than the Schedule fee. The difference between the Schedule fee and the doctor’s fee is called the gap fee. If a service is not subsidised by the MBS, you will have to pay the entire fee.

Fees for services in hospital

If you’re treated as a public patient, Medicare pays for your treatment, medicines and care while you are in hospital, and for follow-up care from your treating doctor in an outpatient clinic.

For private patients in a public or private hospital, Medicare pays 75% of the Schedule fee for services provided by your doctor. If your doctor charges more than the Schedule fee, your health fund may pay the gap fee or you may have to pay it as an out-of-pocket cost. You will also be charged for hospital accommodation, operating theatre fees and medicines. Private health insurance may cover some or all of these costs, depending on your policy. You may have to pay an agreed amount of the hospital fee (an excess), depending on the type of hospital cover you have. Fees charged by private hospital emergency departments are not covered by Medicare or private hospital cover.

Before being admitted to hospital as a private patient, ask:

• your doctor for a written estimate of their fees (and if there will be a gap), who else will care for you (e.g. an anaesthestist or surgical assistant), and how you can find out what their fees will be
• your private health fund (if you belong to one) what costs they will cover and what you’ll have to pay – some funds only pay benefits for services at certain hospitals
• the hospital if there are any extra treatment and medicine costs.

Health funds make arrangements with individual doctors about gap payments. Choosing to use the doctors and hospitals that take part in your health insurer’s medical gap scheme can help reduce out-of-pocket costs.

Fees for out-of-hospital services

When making an appointment with a doctor or service provider, ask how much you will have to pay. Some doctors bulk-bill for their services, which is when they bill Medicare directly and accept the Medicare benefit as full payment. This means you don’t pay anything for that appointment. Other doctors charge a consultation fee, which means you pay the account at the time of the consultation and then claim the Medicare benefit. The doctor’s receptionist can often send the claim to Medicare when you pay the bill.

Generally, Medicare pays:

• 100% of the Schedule fee for GP visits
• 85% of the Schedule fee for visits to specialists
• 85% of the Schedule fee for approved imaging scans and blood tests.

You will have to pay any difference between what the doctor or service provider charges and the Medicare benefit. Private health insurance does not cover the cost of these out-of-hospital medical services.

Medicare also subsidises the cost of radiation therapy in private clinics. How much Medicare pays depends on your treatment plan. Ask your provider for information about out-of-pocket costs.

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Medicare Safety Net

The Medicare Safety Net applies to out-of-hospital costs. Once your out-of-pocket costs go over a certain amount (called the threshold), Medicare will pay a higher benefit for eligible services until the end of the year. There are different thresholds depending on your circumstances:

• Individuals do not need to register for the Medicare Safety Net as Medicare automatically keeps a total of your expenses.
• Couples and families need to register for the Medicare Safety Net, even if you are all listed on the same Medicare card. Once you are registered, Medicare combines your medical costs so you are more likely to meet the threshold sooner.
• For more information about the Medicare Safety Net or to download the registration form, visit humanservices.gov.au and search for “Medicare safety net” or call Medicare on 132 011.

Ways to manage costs Ask your health care provider for a written quote for fees. If you receive a much higher bill, show them the quote and ask why the bill is higher. Ask your GP to refer you to a doctor in the public system. Private patients can consider switching to a doctor who charges less. You have the right to be treated as a public patient in a public hospital even if you have private health insurance. Before you are admitted, the hospital will ask whether you would like to be treated as a private or public patient. Some newer treatment options can be very expensive and may not offer more benefits than traditional approaches. Ask if other treatments would be as effective but cost less. If your doctor charges more than the Schedule fee, ask if they will consider an exception in your case. If you can’t afford treatment, ask your doctor if the costs are negotiable – some doctors may agree to reduce their fees. Find out if you can pay in instalments or have more time to pay your bill. Check if you will be charged interest.

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