Out of pocket expenses (gap cover)

A 'gap' is the amount you pay either for medical or hospital charges, over and above what you get back from Medicare or your private health insurer. Some health funds have gap cover arrangements to insure against some or all of these additional payments.

Hospital gaps

Many hospitals have arrangements with health funds to fully or partially cover costs relating to hospital fees including accommodation, theatre, and labour ward fees. If you go to a hospital that does not have an agreement with your health fund, you may face significant out-of-pocket expenses for your treatment.

If your health insurance policy has an excess or co-payment, you will have to pay the agreed amount of excess or co-payment towards the cost of hospital treatment out of your own pocket, even if your hospital has an agreement with your fund.

Before you go to hospital, you should ask the hospital and your health fund to find out exactly what is covered with your policy.

Medical gaps

Gaps for doctors' fees come about when your specialist, and/or other doctors involved in your hospital care, charge more than the Medicare Benefit Schedule (MBS) fee. 

Some health funds have gap cover doctors agreements made with particular doctors that may cover all or some of the doctors' fees for your hospital treatment. Unless your health fund has a gap cover arrangement in place with your doctor which will cover all of your doctor's charge, you will have to contribute towards the doctor's bill out of your own pocket.

While the Government sets a fee for every medical service in the MBS, the Government does not set doctors' fees and the doctor is free to decide on a case-by-case basis whether he or she wishes to use an insurer's gap cover arrangement.

Before you go to hospital, you should ask your doctor for an estimate of their costs, if there will other doctors involved in your care (e.g. anaesthetist, assistant surgeon) and what their charges will be. You should also check with your health fund to find out exactly how much is covered with your policy.


A prosthesis is an artificial substitute for a missing body part, used for functional or cosmetic reasons or both. Surgically implanted prostheses are sometimes required during a medical procedure, such as a replacement lens for a cataract surgery, an artificial hip joint, a pacemaker, or a heart valve.

For medical procedures covered by the Medicare Benefits Schedule (MBS), your health insurer will fully cover the cost of at least one prosthesis, if required (called a 'no gap' prosthesis).

In some cases, an alternate prosthesis may be available which costs more than the 'no-gap' version. If one of these prostheses is used, you will have to pay the difference between the 'no gap' amount and the total amount charged by the supplier for the prostheses.

For each procedure, you should check with your health fund if you are covered, how much your policy will pay for a particular prosthesis, and whether you will have any 'gap' to pay.