Out of pocket costs and your private health insurance

Edit: New readers to the topic can join as of December 2023 by clicking here.

Calling all private health insurance policy holders: we need your help

Over 45% of the Australian population have private hospital insurance, and 55% of the population have general (or “extras”) insurance. That’s a lot of Australians!

But, these policies can be extremely complex (as well as expensive). What you’re covered for isn’t always clear and you have to navigate a tricky system of insurers, doctors and hospitals to figure it all out.

We’re working on a report on out of pocket costs. That’s the gap you pay when your insurance doesn’t fully cover a treatment, operation or service.

We want to hear your stories. Can you tell us about a time you paid out-of-pocket costs with your private health insurance?

It would be helpful if you could include:

  • Your state/location
  • The type of policy you have (top/basic etc.) and the fund (if you’re comfortable telling us)
  • The procedure
  • Any specifics that might be relevant like type of specialist, whether you stayed in hospital for a while, changes to treatment
  • Any problems you had, including understanding the type of procedure, finding out how much it would cost, finding out a treatment was not included or sourcing information on the costs

We might want to include your story in our report, which we can anonymise. We’ll reply to your post if we’re interesting in your story or if we’d like more detail, and you’re more than welcome to say no if you don’t want it to go beyond this forum. Any post here will help us understand this issue in more detail so thanks in advance!


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I have had 2 major and 1 moderate surgery in the past 10 years and almost each but not all in the chain had out of pockets. With most surgeries cover the real “rub” comes with the consulting surgeons, anesthesiologist, etc, etc who are at arms length from you.

The general problem is discovering who is involved, potentially involved, and in or not in your plan, who has no-gap arrangements, and the reality you can pick your surgeon, but not the anesthesiologist, any assisting surgeon, the lab processing, radiologists, and the sometimes long line of supporting medicos involved.

Each has always provided their estimate but one surgeon provided a list of 5 possible anesthesiologists (working for different practices) that might be there on the day, and they each had unknown and varying relationships with the cover as well as different fees. It becomes a raffle where you play the game and then learn how much the ticket cost.

The insurers always say to ask and negotiate. Easier said than done and IME few providers are into negotiation, they just hand you their price sheet that details your insurance cover and gap. Those in the line of supporting medicos are usually opaque until the bill, if any, arrives.

Since one needs a referral the consumer is in a complex situation to discover such things, and when you need medical attention are you always up to doing it anyway?


Thanks @PhilT - the referral point is an important one. I’ve spoken to some other advocacy groups about referrals and it seems that they just happen around the medical community and who doctors went to university with.

This is rather than being able to tailor the referral to the patient’s concern (price? personality?).


In my case my health fund will cover fully any stay in hospital. However when it comes to the doctor or specialist they just tell you or more correctly their office staff tell you this is the extra that you will pay. There is no negotiating, pay it or get out. It seems to me they arbitrarily demand what they think you can afford.

Absolutely! Anesthesiologists in particular really grind my gears. Our family has had out of pocket of $0 to the tune of over $1k for exactly the same procedure to different Anesthesiologists.


I have had top Hospital and Extras with no excess for many years. Live in Victoria. I had a triple by-pass a couple of years ago. Out of pocket expenses were Heart Surgeon a little over $4000, Anaesthetist around $700. There were no out of the ordinary issues. I was lucky enough to have some shares that could be sold at the time to cover the out of pocket expenses.

Thanks @fae, @someozi and @newhaven - very helpful! :slight_smile:

At law the issue is ‘informed consent’. A person in need of medical treatment is rarely in the mental space to deal with ‘The Medical Industrial Complex’. No matter how many clever questions you ask, not even a lawyer will be able to untangle the social, various grades of corrupt, or merely unconcerned behaviour of medical professionals. They will argue that all their focus should be directed to treatment, and cost or administrative procedures are not their field of concern.

Recently I obtained an MRI. At the time of booking, I was advised of an uplift of $300+. On attendance I was advised this uplift was $700+. All the usual excuses and apologies, offer to speak to the Manager tomorrow, did not change the fact that I was misled, or deliberately lied to, and not given the correct information to make an informed decision at the time of booking. Once you are on site, and time has elapsed prior to a return appointment to a specialist, you are obliged to continue.

The Defensive Medicine playbook exists. No medico has been sued at negligence for performing unnecessary diagnostic procedures. However, during medical negligence litigation the existence or otherwise of ‘current testing procedures’ is an objective test to confirm the speculated nature of appropriate ‘deliberations’.

In summary, no diagnostic procedure has improved anyone’s health. This, and associated or supporting roles, are an area of considerable corruption. The existence of corporate structures, with the requirement of managers to pursue maximum profits, are anathema to health outcomes. The Health insurance contract does not satisfy the requirement of ‘uberima fides’ (utmost good faith). Corporate structures and the long tail/trail/entrails of sub-contractors, over whom you have limited influence can only be controlled by a caring Government. Good luck with that pusuit.

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That is well stated. I have experienced that attitude on multiple occasions where the surgeon palmed the cost issue to the office staff. In one case that office staff was so rude and arrogant over time I complained to the surgeon, but a year later nothing had changed including the attitude. Why? That office staffer apparently shielded the surgeon from the patients ire about most things and kept a tight shop running, eg financial management.

I recently lost a distant friend in Israel who had breast cancer. Within a week of being told she was “clear” after treatment, she became terminal and died in weeks because it had gone into her liver and those surgeons had neglected routine whole of body diagnostics to check on the disease metastasising beyond the obvious, while treatment progressed.

When there is any illness suspected or imagined, who is to decide whether any test is frivolous, agreeing that many could well be defensive against law suits, but.

I presented to a GP for serious abdominal pain with non-specific symptoms leading to “it could be food poisoning or appendicitis”. No tests were done and I was sent home with a come back if it does not get better. Two days later I developed excruciating pain but it went away as I was about to ring 000 and thus thought it was food poisoning and I was getting over it. My partner retuned from work and told me I was incoherent and we were going to the GP again, where I was directed to the ER straight away. They still considered food poisoning or now a burst appendix yet they waited almost 24 hours in hospital while I became increasingly incoherent before they did “The Expensive Diagnostic”, and that happening as a private patient! I was next up as soon as a theatre became available. If a test was ordered when I first presented I would almost certainly have much less of a scar than that left by the emergency surgery, as well as many fewer weeks recovering.

So an honest question, what is your equation for saving a dollar versus potentially prolonging a life and when is a test non-frivolous?

Corruption and ripping off patients (customers) happens in every business, and healthcare is 100% a business in some eyes while others think it a service in full or at least part. It seems that the current mob is slowly but surely working toward the American for profit model where it is all private enterprise and for those who cannot afford it or have insurance, by charity. For those of us who think healthcare should be weighted toward a universal service, that is a problem with government de jour, and the voters who elect and return that government.


@geofff & @PhilT I find this idea of ‘informed medical consent’ very interesting as there are instances where this may affect people financially in out of pocket costs.

Imagine your cover covers you for only certain procedure numbers, and you go in under your insurance. When they’ve opened you up on the table they suddenly find you need a different type of procedure so perform that operation, and then later you find you aren’t covered. Are you up for the medical costs in that instance?

There’s an argument to be had that you didn’t consent to that procedure, only the one you thought you were going in for.

Everyone is an expert AFTER THE EVENT. This was a discussion wrt out of pocket expenses before the outcome is known. Your particular case is not on point. Perhaps the diagnostic competence of the GP is in question. People get sick and people leave this earth. Sometimes it is earlier than it should have been with appropriate medical care. We may be discussing cost/benefit in the majority of cases.

I truly believe that more than 50% of specialist consultations are social events, masked as monitoring progress. A greater percentage of pathology and radiology is unnecessary. That is why Medicare Australia has reduced Medicare rebates so that they may be some patient backlash.

It is good to cherry-pick ideas from other health systems. In Japan, there is an agreed sum each year for diagnostic procedures etc. The medical community self accesses the competence of doctor’s requests and gives ‘feedback’ to over zealous users. The cost per procedure decreases when the agreed annual limit is exceeded.

@geofff, you appear to have strong opinions. Are they backed by solid evidence or research? This is somewhat anecdotal but seems to have merit.

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My role at PBAC or the Investigation review committee at what is now Medicare Australia is not anecdotal. There is so much ‘subjectivity’ in medical research. Financial self interest compromises most research. Just look at who funds the research and whose greatest interest is being served. The Medical Industrial Complex completely overwhelms the public interest within the halls of US political policy and Australia merely trots behind.

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Thanks for the glimpse of your background @geofff. It would be impossible to argue those points about funding and research, or about related US policy with us trotting behind as we always seem to do, regardless of the benefit or consequences. Our pollies seem to live for donations (what a surprise) closely followed by a pat on the head and a “good boy” from their US counterparts.

I will expand on the deficiencies of informed consent when being admitted to a Private Hospital. If you are on the highest coverage, your awareness of costs are the excess of your hospital cover and possibly the doctor you have selected to perform a procedure. You are asked for a credit card and sign a form agreeing to pay all “reasonable expenses”. How can there be informed consent to future expenses? Tilly has suggested that any uplift over Medicare rebates is whatever the hospital or corporate entity believes you can afford. At the very least, you have no forewarning of any policy or guidelines as to your liabilities. No sensible person would agree to any repairs to life’s necessities without a quote or multiple quotes for activities similar to hospital expenses. I have paid 100-200% uplift for anesthetists. As I suffer from multiple health issues, a GP cannot coordinate your treatment effectively and a hospital appointed ‘physician’ is required. The number of follow up visits, however brief or relevant, is completely our of the payers control. The number of diagnostic procedures is also out of the payers control. Graduates and trainees may perform a function and this activity is charged, above Medicare rebate, by a supervisor that may or not be physically present. I have experienced a situation where the ‘trainee’ botched the necessary sample, meaning the diagnostic test was imperfect. A repeat procedure was ordered three days later and two charges above the Medicare rebate were added to a bill for a two week stay. Queensland has a large expat, elderly population and overcharges for procedures at Private Hospitals compared to NSW. The sample of more than three experiences in each state at different hospitals is not statistically significant. It does suggest corporate greed, unnecessary repeated diagnostic procedures, and increasing gaps over the Medicare rebate. Many Private Health Insurers operate intra-state and could provide data to identify overcharging between Private Hospitals and the cultural differences between states and regions.


I’ve been stung here too, although not recently enough to provide you with all those specifics. It’s a very opaque part of the final bill and you have pretty much no control over what these additional services will cost you, typically you find out a few weeks after the event.

Getting off track, but my real irritation is with the unnecessary surgery that some specialists push on you. A decade ago I had a completely useless sinus operation that I was assured would cure chronic congestion, it was a horrible procedure, cost me a bucket load (including the surprise ~$1,500 for the anaesthetist) and only when my symptoms returned immediately after a painful 2 month recovery did I do some digging to find out that the success rate of these procedures is not great, many need to have follow up surgery
Discussing after the fact with a colleague I discovered that he had undergone the same procedure 5 times to try and fix his sinus issues! Almost single handily he was paying for the ENT’s kids to go to some very expensive schools.
There is also no long term follow-up as to the lasting patient outcomes and I can see why. They don’t want to know!

Then there was some serious hard sell from a neurosurgeon
I had a bad back problem leading to some awful sciatica which completely resolved itself 2 days after seeing the neurosurgeon for initial consultation. If I’d taken the surgery option straight away I would have been down ~$4,000 and exposed myself to the risks of complications from an operation on my spine. So thankful I have a very good GP who warned me about the hard sell and told me to wait. I was in so much pain I was ready to do anything.

I’m much wiser now, but your instinct is to trust these specialists.

It was covered late 2015 by the ABC


State NSW, Top hospital and extras. BUPA
What annoys me is the so called “preferred providers” applies to both medical and dental.
e.g If I use a “preferred dentist” then I get more rebate. The dentist I go to is a 10 minute walk, he is not a “preferred dentist” The closest “preferred dentist” is a 30min drive each way.
Same applies to hospitals, I get a bigger rebate if I go to a "preferred hospital.
Also the misleading advertising that implies that if you have top hospital cover, you will have a private room. I have had the misfortune of have regular admissions to hospital. Every time it is a fight to get a private room. The reason always given “there are no single rooms” But after a standoff the staff always find a private room.

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I had a cover from Bupa and I had to remove my wisdom tooth. I had to pay most of the costs out of the pocket.

That was my first medical insurance and obviously I didn’t have much experience with buying and analysing healthcare policies at the time.

Bupa did not pay the hospital fee and some other fees saying that my policy did not cover those.

Even with HCI (my current provider) does not pay for prescriptions unless they are $38 of something.

Imo, that’s just ridiculous given that I have the top cover and if you need drugs worth more than $38, you would be terribly sick.

What im not planning to do next is to ask the chemist to give me some brand that allows me to exceed the $38 for the whole bill.

The “game” is to ask your GP to prescribe non-PBS medications in a way you can buy lots at once. I have one that is about $140 a go for 6 months. I only pay the PBS amount and get $100 back.

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Thanks for your input everyone - keep the stories coming! It’s very helpful in informing our thinking on the issue.