Elective surgery 101: Understanding out-of-pocket costs

Whether you’re preparing for surgery or a significant medical treatment, understanding the costs involved is crucial.

Unexpected expenses can add stress to an already challenging time, but with the right knowledge, you can minimise any financial surprises.

In this blog, we’ll walk you through what’s covered by your private hospital insurance, potential out-of-pocket costs, and how to plan ahead to ensure you’re financially prepared for your procedure.

What’s covered by your private hospital insurance?

Hospital insurance, also known as hospital cover, helps cover costs when you’re admitted to hospital for surgery and other types of medical treatment. It helps cover the cost of doctors’ and anaesthetists’ fees, as well as other hospital costs like accommodation, prostheses and theatre fees.

With hospital insurance, you can go to a private hospital for treatment, choose your own specialist and time of treatment, and gain access to a private room (so long as it’s covered on your policy and there’s one available).

The specific hospital procedures and services you’re covered for (e.g. chemotherapy, a colonoscopy, tonsil removal, knee reconstructions etc.) depends on the level of hospital cover you choose.

What does HBF hospital insurance cover?

Where your treatment is an included service on your hospital cover, your hospital costs will either be fully or partially covered depending on the type of agreement your health fund has with your specialists and hospital.

With HBF, when you're admitted to a Member Plus hospital for treatment, you'll benefit from reduced out of pocket costs as well as services like private or shared rooms, hospital boarders, in-patient pharmacy and more, depending on your level of cover and eligibility of your preferred hospital. Just be aware there may be out of pocket costs for your procedure, which can include excess or co-payments, as well as any out-patient services.

What are some potential out-of-pocket costs?

Out-of-pocket costs, also known as gap payments, are the difference between what your doctor or hospital charges and what Medicare and your private health insurer will pay. These costs can vary based on several factors:

Doctor’s fees: Specialists and surgeons may charge more than the Medicare Benefits Schedule (MBS) fee, leading to a gap you’ll need to cover. The MBS is a list of health professional services that the Australian Government subsidises. MBS items provide patient benefits for a wide range of health services including consultations, diagnostic tests and operations.

For instance, if your surgeon charges $1,800 and the MBS fee is $1,000, Medicare will cover 75% of that fee, and your insurer covers the remaining 25%. But if your surgeon doesn’t have a gap arrangement with your insurer, you may have to pay the difference out of pocket.

Excess: Depending on the excess amount you've opted for on your hospital cover, you may need to pay this when receiving hospital treatment.

Private room: You’ll have the option to request a private room, however please note that private rooms are offered based on medical need and availability. Private room availability is at the discretion of your hospital. You may incur out of pocket costs for private room accommodation in a public or non-Member Plus hospital.

Medication costs: Any medications prescribed to you during your hospital stay are generally not covered by your private health insurance. This means you may have to pay for these medicines out of pocket, even if you’re a private patient.

In-hospital allied health services: If you require services such as physiotherapy or speech therapy, these services may be included in the hospital charges, or may be covered on your extras policy.

Aids to recovery: You may be required to pay for items to assist in your recovery, such as slings or compression stockings. These may be covered under extras insurance, depending on the level of extras cover, if any, you hold.

Hospital facilities and incidentals: You may be charged for access to and usage of facilities like phone, wi-fi, television and pay-TV channels.

Pathology and radiology tests: If you need diagnostic tests, some hospitals’ services, such as x-rays and blood tests, may be billed to you.

Surgical assistants and anaesthetists: You may be charged fees by certain specialists that are not fully covered (or covered at all) by HBF or eligible for a rebate from Medicare.

Medical Devices and Human Tissue Products: Items that are listed on the Australian Government Medical Devices and Human Tissue Products list at the time of your procedure will be covered and benefits paid in line with the minimum benefit rate specified on the list. If your surgeon charges more than the minimum benefit rate there may be out of pocket expenses. Check with your surgeon and with HBF prior to treatment.

Ongoing care needs: Sometimes, you may have ongoing care needs such as wound dressing or IV antibiotics after you’re discharged from hospital. These may be billed to you directly

Informed financial consent

Before your surgery, it’s your right to ask for an estimate of all potential costs from your doctor and hospital. This process, known as informed financial consent, helps you understand what you might need to pay and prepares you financially.

We encourage you to have open conversations with your doctor, hospital, and insurer about all possible costs. Don’t hesitate to ask questions – being informed is the best way to avoid unexpected bills.

If you’re an HBF member and have been referred to the hospital or need significant medical treatment, we recommend reaching out to us as soon as possible. We can help you understand your coverage, the benefits available, and provide guidance to minimise any potential out-of-pocket costs.

Managing unexpected medical costs

Even with the best preparation, sometimes costs can exceed your expectations. If this happens, it’s essential to know your options:

Review your bills: Make sure you understand each charge and ask for clarification if something doesn’t seem right.

Use resources: Tools like the Australian Government Medical Costs Finder can help you compare costs for similar procedures in your area, giving you a better idea of what to expect.

Seek support: If your out-of-pocket costs are higher than expected and you require financial assistance, please call us on 13 34 23 – we’re always here to help.

Planning for surgery can be overwhelming, but understanding your financial obligations doesn’t have to be. By knowing what’s covered by your private health insurance and where you might face out-of-pocket costs, you can approach your surgery with confidence and peace of mind.