Health insurance and Medicare gaps

Why does legislation stop health insurance covering Medicare gaps?

Why can’t there be an option in health insurance for Medicare gap up to a certain value (eg $500 or $1000) on some services (I understand it could not cover everything esp when one passes their Medicare threshold). Medicare is great - we are a lucky country but our health system needs more support. Why can’t health insurance assist in covering / supplementing tests that Medicare does not even cover especially for people who have complex health issues.

It would be great to create options to assist in closing Medicare gaps or supplementing health costs outside of Medicare (eg use of commercial labs to do specific tests that Medicare pathology providers do not provide).

The government has also ceased the medical rebate benefit that one could claim on their tax return (which was minor but at least supportive).

What can be done to change the current situation and make it more supportive?


Legislation stopping health funds to cover the gap has been abolished. All health funds have gap schemes under which they cover up to a certain amount the difference between what the doctor charges and the Medicare scheduled fee for a service. There are “No gap schemes” - the health fund covers the full gap - or “Known gap schemes” the health funds covers a certain amount of the gap and doctor can charge up to a certain amount such as $500 more than the health fund and Medicare covers as long as they tell you that beforehand.

Each health fund has a different capped amount of what they cover under their gap schemes. Doctors can subscribe to the gap scheme of one health fund but not to the gap scheme of another fund. And to make this even more confusing they can decide from patient to patient if they charge them the capped amount under a gap scheme or a higher amount which means that the patient will be out-of-pocket.

If you want to check how your fund performed, you can have a look at the PHIO State of the Heath Funds report, the gap results can be found on Table 4a and Table 4b on page 19.


Does this cover out of hospital gaps or in hospital only?

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Why are Health Funds allowed to vary the increases in contributions across the membership. When the objective is to charge the same rate regardless of age or sex, and only charge families and singles different premiums.
If the minister approves an increase of 6% , why is my increase 12%. Is this based on age or claims history. Does it apply to new members or just to continuing members ?
Ron Hunter 43623

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Private health insurance only covers services in hospital so out-of-hospital gaps at your GP or specialist are not covered.

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Good question, the approval of premium increases is up to the Minister. For the same policy the same premium applies to new and old members. CHOICE is campaigning for clearer premium increase communication that tells you the percentage increase so that you can see if your increase was higher than the average, we are also asking for the new premiums to be released earlier so that you have a better chance to shop around before the higher premium hits on 1 April every year.
Tip: Always pay your annual health insurance premium in March and you will delay the premium increase by 12 months.

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How can we change this ? Gaps are getting larger and tests can also not covered by Medicare leaving person full cost of test. These cannot even be claimed on your tax return anymore.


This is a case of be careful what you wish for. If health insurance was covering those gaps and perhaps also gaps of GP services, the danger would be that we may get a two-tiered health system. Health insurance would get even more expensive and only the people who could still afford it could afford care.

Instead, if your condition is not urgent, ask your GP if instead of seeing a specialist in their rooms - where you pay a gap - you could see them at a outpatient in a public hospital - it may take longer to get an appointment but you won’t have to pay.


Also for procedures you can ask your specialist for “no gap” which means your health fund and medicare pay and you don’t pay any out of pocket (unless you have an excess). However you have to ask the specialist first and not all will agree.

Also with complex health issues, once you get to the medicare threshold for the year the medicare component that comes back to you is greater. hence my specialist cost me $2.45, but I did have a thousand or more out of pocket expenses first. I don’t think that is covered with hospital admissions or day surgery just dr. appointments, scans, x-ray, ultrasounds, bood tests (all out of hospital).

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We certainly would not want to end up with anything like this disgraceful US situation.

Medicare rebates for surgery are due to change in July.

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Here’s a bit from Australian Unions that has a petition link as well. From the AU site and also while no exact detail of what is being removed there are some figures about which areas of cover will be affected

"The Government has not released full details of the changes due on 1 July, but we do know that this round involves changes to:

  • 188 cardiac surgery items
  • 150 general surgery items
  • 594 orthopaedic items"

Two other areas have also been highlighted and these are

  • Vascular services (e.g. varicose veins)
  • General Practice (GP) and Primary Care

What impact might it have

Well no refund from Medicare means full cost has to be borne by the patient and or their insurance. So "How much you will be affected by these changes will depend on what medical services you require.

Medical experts have already warned these changes will increase out of pocket costs – hundreds of dollars for some common procedures and up to $10,000 for rarer conditions."

In my opinion we get closer to the US system every day, and just to be very clear (as pollies are oft using this line) this is not a good thing…it is a very very bad thing. If the Medicare items are removed you can also be sure that Health Insurance premiums will go up sharply.

I remember some people disparagingly calling Labor’s campaign about Medicare “Mediscare”, well it is just taking a bit longer but “Mediscare” it isn’t. Medicare to the the LNP is a thing to be removed as was Medibank that Whitlam gave to Australia, as soon as the Lib Nats got in the stake was punched in to kill off everything but the Private fund, not until Hawke/Keating did we get back a version of Universal Healthcare with Medicare. LNP are taking the job of kill off more slowly so it disappears without fanfare, like the frog in the pot who is heated up bit by bit rather than dropping it into boiling water…end is still the same “death” but the shock with the slow death is spread out so not noticed as much.

Website article

Petition site


The claim is over the top speculation. I have read several reports where various “experts” were interviewed. The common thread is it was time to review the system and the changes were to be expected but implementation is being rushed. For example, surgery that is booked for post 1 July may be a different price to the one quoted because the surgeons just don’t know enough about it yet.

It seems a little soon to declare the sky is falling or that we are joining the USA. Perhaps in six months this could be revisited to see just what did happen and was it so terrible.

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Well it may be sooner when we know what is changed after 1 July. I’m always sceptical about LNP motives and more so these days.

I always hope for best outcomes but often disappointed.


The Liberal’s long term policy has been to privatise everything they can and sell off the rest. Redundant?

Sometimes when it hits the media the pushback is enough for them to pull their heads in until next time, but there is always a next time.


The Liberals have hated Medicare since before it began. Whitlam established Medibank. Fraser privatised it (OK, maybe not technically, but practically). Hawke established Medicare and the Liberals have been white-anting it at every opportunity.

The Institute of Public Affairs has had a lot to say on the matter of public health care. Members of the IPA were prominent in the founding of the Liberal Party. The furthest back I could go was their wish-list for Tony Abbott, item 20 of which is means-testing Medicare. Item 49 advocates completing the privatisation of Medibank. There’s a second list, which is no longer on the IPA’s web site, but has been archived. The item numbering continues from the first. Item 92 is “Abolish the Medicare levy surcharge”.

In the same issue of the IPA Review is this article titled “The Folly Of Preventative Healthcare”.