06.Mind the gap
If you receive treatment as a private patient, your hospital insurance will not always cover the full cost. This difference between the hospital and/or doctor’s bill after you receive your Medicare and health fund benefits is called a gap. This is on top of any excess and co-payment you agree to pay when taking out your policy.
A 2007 report from the Department of Health and Aging found the average gap was $1011 for overnight patients in a private hospital and $557 for overnight patients receiving treatment as a private patient in a public hospital. These charges vary state by state, with the highest average gaps occurring in NSW. Before you are charged a gap, you must give informed financial consent beforehand, which means you will know about additional charges.
Gaps can apply to hospital bills but are mainly charged on doctor’s fees, such as those for specialists. There may also be a number of doctors involved in your treatment; the 2007 survey found close to 70% of hospital patients were treated by an anaesthetist, of which about a third had to pay a gap charge for this treatment. The average out-of-pocket expense was $320 for the anaesthetist alone.
How to avoid the gap
Many hospitals have agreements with private health insurers under which you are not charged a gap for hospital fees. Health insurers also have arrangements with doctors under which the doctor does not charge you a gap, or you may pay a “known gap” amount.