Health Insurance Gap 

Find out what a gap is in health insurance and how to avoid one on your policy here with Savvy.

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, updated on July 10th, 2023       

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Health Insurance Banner - Woman sitting in a doctor's office looking at a report with her doctor

When looking at health insurance policies, you may have seen the phrase ‘gap payments’ or ‘no-gap service,’ and wondered what this means. You can find out all about gap payments, what they are, who charges them and what this means for out-of-pocket expenses here with Savvy.

What is a health insurance gap in Australia?

A health insurance gap refers to the difference between the fee charged by a medical practitioner for a particular service and the amount covered by Medicare. The Medicare Benefits Schedule (MBS) sets a fee for each medical service which is covered by Medicare. This fee is often lower than what medical practitioners actually charge, meaning patients may have to pay the difference, or ‘gap,' between the MBS fee and the actual fee charged by the practitioner out of pocket. 

What is no-gap health insurance?

No-gap health insurance is a type of policy that covers the full cost of medical treatment without any out-of-pocket expenses or additional charges. Such policies aim to eliminate the gap between the medical fees charged by healthcare providers and the amount covered by Medicare, but whether they cover part or all of the gap will depend on the level of cover you choose to buy.

No-gap health insurance policies are offered by many of the top private health insurance providers in Australia. For instance, no-gap hospital cover may cover the costs of hospital accommodation, theatre fees, doctor’s or surgeon’s fees and other in-hospital medical services. However, it's important to note that there may still be some out-of-pocket expenses for certain medical procedures, such as specialist consultations and diagnostic tests which are provided to you as an outpatient. In addition, you may still have to pay the excess amount you opted for when you bought your health insurance policy to be able to make a claim on your policy. 

No-gap extras cover is usually only provided for basic medical treatments which aren’t covered by Medicare, such as physiotherapy, optical and dental. Some extras policies may offer no-gap treatments through healthcare providers which are affiliated with the health fund. This means if you want to get a teeth clean with no gap, for example, you may have to visit a dentist who is affiliated with your particular health fund and offers no-gap dental treatment for that fund’s members.

How can I get health treatment with no gap payments?

Getting health treatment with no gap payments can be a challenge, but it isn’t impossible. Some of the ways to do so include: 

  • Bulk billing – one way to get health treatment with no gap payments is to find a medical practice that offers bulk billing. Bulk billing means that the medical practitioner bills Medicare directly for their services and you don't have to pay anything out of pocket. To find a medical practice which offers bulk billing, you can search online or ask your private health insurer for a list of participating providers. Many medical practices will also display a sign or sticker indicating that they offer bulk billing. When you make an appointment, be sure to ask if bulk billing is available for your particular treatment. 
  • Use your health fund-approved provider – another way to avoid gap payments is to choose medical practitioners who participate in your private health insurer's ‘no gap’ or ‘known gap’ schemes. These schemes are designed to reduce or eliminate out-of-pocket expenses for patients, as the insurer and medical practitioner have agreed on a set fee for a particular service. 
  • Compare prices – a third method to reduce gap payments is to compare prices and fees charged by different medical practitioners. This can help you find a practitioner who only charges the MBS fee for a particular service, which can eliminate the gap payment. 

It's important to check your private health insurance policy to see what level of cover you have, and whether there are any exclusions or waiting periods which could impact your ability to claim for a particular treatment. 

More of your frequently asked questions about health insurance gaps

How do I know what the gap will be for a particular health treatment?

To find out the gap there will be for a particular health treatment, you can ask your medical practitioner for an estimate of the total cost of the treatment and what portion of that cost will be covered by Medicare. Your private health insurer may also be able to provide you with an estimate of any potential gap payments if you provide your fund with the Medicare item number for the procedure you are having done. 

Where can I find out what the Medicare Schedule Benefit fee is for a particular health procedure?

To find out what the Medicare Schedule Benefit fee is for a particular health procedure, you can check the Australian Government's Department of Health website. They have a searchable database that allows you to look up the MBS fee for a specific procedure. 

Can I still receive treatment if I can't afford to pay the gap payment?

You may still be able to receive treatment even if you can't afford to pay the gap amount upfront. Many medical practitioners offer payment plans or other arrangements to help patients manage their costs over time. However, it's important to discuss payment options with your medical practitioner before your consultation. 

If I've used up my extras policy benefit limit for the year, will I have to pay the full cost of treatment?

Yes, you may have to. If you've used up your extras policy benefit limit for the year, you may need to pay the full cost of treatment for any additional treatment you receive that is no longer covered under your policy. The policy limit will depend on the level of cover you have and the specific terms of your policy. It's important to review your policy carefully to understand what's covered and what isn't. If you have any questions or concerns, you should contact your private health insurer for more information. 

Can I see a GP for free with no gap payment?

You can see a GP with no gap payment if they bulk bill. This means that they will bill Medicare directly for the cost of the consultation, and you will not need to pay anything out of your own pocket. 

What is the difference between a gap payment and an excess?

The difference between a gap payment and an excess is that a gap payment is the difference between the Medicare Benefits Schedule fee and the amount charged by a medical practitioner. An excess is a set amount that you agree to pay towards the cost of a hospital admission or day surgery when you take out your hospital cover private health insurance policy. Excess amounts vary between zero up to $750 for singles.  

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