Private Health Insurance Cover And The ‘Gap Fee’

Your direct debit comes out every month for your private hospital and extras health insurance premium, and Aussies are very lucky to have a great Medicare system, so you think you’re fully covered for any medical expenses you have. Wrong!  Unfortunately this isn’t always the case! Billy understands it’s frustrating that you pay all these premium costs then have to fork out again for more, so we have created this handy guide for you to understand what the Gap Fee actually is, and how this out of pocket costs can affect your hip pocket. Then we also let you know how you can compare health insurance providers and compare health funds through Billy Explores, and get the best private hospital and health fund for your needs with minimum gap fees.

What Are Gap Fees?

Those pesky things – gap fees! They always pop up when you go to pay the dentist or claim a treatment and you have to pay out of your own pocket more for the service. A gap fee is the out of pocket cost you have to pay when you receive hospital treatment, or any another medical treatment, and that treatment costs more than what you are able to claim back from Medicare or through your private health insurance.

For example, you may visit a dentist who charges $250 for a regular check and clean, however your health fund will only cover $200 of this cost. The $50 out of pocket expense you must pay is called the gap fee.

Doesn’t Medicare Cover Everything?

Medicare does still cover quite a bit of service costs, regardless of whether you are a private or a public patient. Medicare has what is called a ‘scheduled fee’ which is outlined in the Medicare Benefit Schedule (MBS), when you are treated in a hospital – this is for every Medicare Line Item as detailed in the MBS.

 Medicare and private health insurance cover 100% of this scheduled fee, as well as the cost of your accommodation and theatre fees, provided you’re treated in a hospital that has an agreement with your Health Fund. Obviously however, not all doctors have agreements with specific health insurance funds, so you sometimes have to pay the difference.

The same applies for extras cover and in your private health insurance policy.

Are Gap Fees Payable For Both Hospital Treatment And Extras Costs?

Yes, generally your private health insurance policy will only cover a certain percentage of services for both hospital treatments and extra costs so you have some out of pocket expenses for both types of health insurance policies.

Make sure you check your health insurance policy for the actual amount that you will have to pay out of pocket for both hospital treatments and health insurance extra costs.

Can I Avoid Paying Gap Fees?

Yes, we’re glad you asked that question as there are lots of ways you can avoid paying gap fees and minimising your out of pocket expenses. Firstly, get in touch with your health fund sa many health funds have preferred health care provider program (for example dentists, physiotherapists, doctors etc). These preferred providers will quite often have arrangements to have reduced treatment costs, so your service or treatment will quite often have a reduced gap fee or even no out-of-pocket costs.

If you’re in for hospital treatment, there are a few terms you need to know about your gap fee and any out of pocket costs. Again, many health funds have arrangements with specific hospitals and doctors for treatment so you can reduce your out of pocket costs, so it pays to ask your health fund for this information before you start researching.

Some health funds have agreements with certain hospitals and doctors to help reduce your out-of-pocket costs, similar to the preferred providers mentioned above. There are different types of gap cover schemes, a few examples are:

No Gap Fee

If your health fund has a “no gap fee” agreement it means that any fees that are subsidised by Medicare (and are more expensive that the Medical Benefits Scheme) are covered by your health insurance policy, so you won’t pay any out of pocket expenses.

Partial Gap Fee

This means your health fund will cover some of your gap fee, and you will have some out of pocket expenses.

Known Gap Fee

Sometime you might hear the term “known gap fee”. If your health insurance provider has a known gap fee, they will cover your out of pocket expenses up to a capped amount.

Of course, there is another way you can avoid paying gap fees, especially if your current health fund hits you with high out of pocket expenses, and that’s to compare health insurance in Australia through Billy Explores! Our panel of health care providers can provide you with the best private health insurance policy for your needs!

Compare Health Funds Through Billy Explores

Of course, the best way to make sure you minimise any gap fees and out of pocket costs is to have the best health insurance policy for your needs! You can do a private health insurance comparison through Billy Explores and get a great hospital treat and extras cover from our panel of providers. You can also do an extras health insurance comparison through Billy Explores – it’s not just limited to hospital treatment cover! Click through and compare health insurance providers from our panel today!