Out of pocket expenses: how do I avoid them?

For many Australians, the cost of covering specialist medical care has become the biggest cause for concern when they become unwell or are injured.

The Reducing out-of-pocket costs for Australian healthcare consumers report reveals there’s been a 12% increase in private medical fees in 2023 (following almost 10 years of average 1% per year increases).  

The figures show the median out-of-pocket fee for a medical procedure in the private health system was $240 nationally in 2023. But some parts of the country are experiencing much higher out-of-pocket costs.  

In the ACT, the median was 146% higher than the national average at $591. In NSW, the median out-of-pocket fee was $279, and in Queensland it was $258. 

Under Australian law, private health insurance cannot cover out-of-pocket charges that are above the Medicare Benefit Schedule fee for the procedure. And insurers cannot cover any of the cost of a consultation in the specialist’s rooms. 

This means out-of-pocket costs are becoming an increasing burden for private patients.  

The cost of care

Industry body Private Healthcare Australia (PHA) is calling for additional measures to help slow the trend of rising specialists’ fees.  

They want the Medical Costs Finder  website to include all specialists and the average fees they charge. Inclusion on the website is currently voluntary and fewer than 1% of doctors have uploaded their fees to the site. 

The Minister for Health and Aged Care, Mark Butler, has said the government will “help Australians find the best value when they need specialist medical advice and treatment, by upgrading the Medical Costs Finder to give more transparency on fees.”  

PHA has also argued for a ‘surprise billing law’ to ensure consumers are not liable for costs that are not properly explained to them before their treatment.  

The report projects that by 2030, without any action to dampen the trend, 14% of people (1.25 million) who need to see a specialist will delay or avoid care because of the out-of-pocket cost. That will eventually impact our economy and public hospitals. 

Reducing the gap

There are measures you can take now to help reduce their out-of-pocket costs. 

Health insurers have search and comparison tools*to help you research potential out-of-pocket costs before you make an appointment to see a specialist.

When you see the specialist, ask for a clear outline of fees. If the costs are not affordable, ask if the specialist will use your insurer’s gap-cover agreement. This will cap or eliminate out-of-pocket costs.  

You’ll also need to have the same conversation about the anesthetist’s fee.  

There are a small number of specialists who are charging fees that should never be charged at all. These payments are not visible to Medicare or your health insurer. They include things like ‘booking fees’ or ‘administrative fees’ – in most cases this billing practice is illegal.  

You should be provided with a clear itemised quote for the medical treatment you will receive in hospital. And you should receive it well before you go to hospital. If you do not consent to the cost, you have the right to find another specialist.  

* The Healthshare search tool features and uses information supplied by practices or practitioners who may have a commercial arrangement with Healthshare. You should discuss your choice of specialist with your GP. Defence Health does not recommend or endorse any doctors.  
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