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Gap Cover for Out of Pocket Medical Expenses

If you need to see a specialist in the private health sector, for example, a reconstruction surgeon, ENT specialist or urologist, get ready to pay some steep out of pocket expenses. A gap can arise when your hospital accommodation or specialist fees exceed the MBS payment.
Fact Checked

Updated: 24 May 2024

When a specialist charges more than the MBS fee, you are responsible for paying the gap. However, private Hospital insurance might help you reduce these out-of-pocket medical expenses. The gap between the MBS rebate, your hospital expenses and your doctor’s fees, could be fully or partially covered by your Hospital policy, depending on your level of cover.

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What are out-of-pocket expenses in health care?

Out-of-pocket expenses also called the ‘gap’, is the amount of money you must pay for health services and treatments that exceed what Medicare and your health fund will cover. Out-of-pocket expenses are generally influenced by the type of service you require, the availability of bulk billing, the specialist fees and the state you live in.

While the Australian government does subsidise specialist services through the Medicare Benefits Schedule (MBS), it rarely covers the full cost of your medical requirements. Out-of-pocket expenses that you might need to prepare for when going to the hospital include:

Out-of-hospital services

The Medicare rebate for out-of-hospital treatments is 85% of the schedule fee; you are thus responsible for paying the difference.

With nearly two-thirds of specialists not participating in bulk billing for out-of-hospital services and Medicare only covering 85%, thousands of Australians must pay for these from their own pocket.

In-hospital treatments

For private patients receiving treatments inside the hospital, the Medicare Benefits Schedule rebate is typically 75%. You and your health fund are thus responsible for paying the remaining 25%.

What does no-gap mean in health insurance?

Gap cover, also called no-gap, is when you don’t have to pay any out-of-pocket expenses. Many private health insurance companies provide medical gap cover insurance on their Hospital policies. However, the gap amount may vary between providers.

Various private health insurance companies offer ‘no-gap’ and ‘known-gap’ services to help you reduce any potential specialist fees that exceed what Medicare will cover.

Gaps for doctor’s fees

When the doctor, specialist, surgeon or anaesthetist that’s involved in your hospital care charges more than the MBS fee, you incur out-of-pocket expenses. However, if your health fund has gap cover arrangements with your doctor, you might not have to contribute toward your doctor’s bill.


The maximum out-of-pocket costs your health fund will cover for hospital accommodation and doctor’s fees charged above the MBS fee. When you know what out-of-pocket expenses to expect, you can more easily budget for any future medical costs.

Important: Before you receive hospital treatment, contact your health insurer to find out if your doctor participates in the fund’s gap cover arrangements. Because doctors might charge on a case-by-case basis, you should also ask you doctors how much you’ll have to pay over and above your insurance coverage. You can find a list of gap doctors on

How does Access Gap Cover work?

Private Hospital plans that include Access Gap Cover helps reduce the cost of in-hospital services and treatments that exceed the 75% that Medicare pays. However, while many health funds provide medical gap cover insurance, it’s still the doctor’s choice whether they want to participate or not.

An example of
a gap payment
and gap cover

If your surgeon charges $1500 for treatment inside a private hospital, and the MBS fee cover is $750, your health fund will typically pay $250. You are then left with a $500 gap. This gap might be covered by your health insurance provider’s Access Gap Cover if the surgeon participates in the fund’s gap cover scheme.

Before undergoing a procedure, you must ask your doctor:

Also, inquire if the hospital where your treatment is planned for has an agreement with your health fund.

Gap cover generally does not apply to:

List of gap health insurance providers in Australia

The below list of health funds providing medical gap benefits are by no means comprehensive but gives you an idea of where to start looking.

Bupa Medical Gap Scheme

Over 96% of all private hospital beds across Australia are in hospitals that have an agreement with Bupa. Where a doctor has chosen to participate in Bupa’s Medical Gap Scheme and agrees to use it for your treatment, you generally won’t pay more than $500 for treatment.

Bupa might even cover the full amount while you’re in a hospital that participates in their gap scheme. Ask your GP to refer you to a specialist that participates in the Bupa Medical Gap Scheme to help you eliminate or reduce out-of-pocket expenses.

Gap cover from Medibank

Medibank Gap Cover Scheme supports you by helping reduce out-of-pocket costs when you receive medical treatments by one of their participating providers. Medibank has both no-gap and known-gap arrangements, where the known-gap does not exceed $500, if it does it must be submitted under the fund’s gap arrangement.

HBF GapSaver

HBF GapSaver is no longer available for sale. However, current members with GapSaver (before the 14th of January 2019) will still be able to use this benefit, but no longer have the option to switch to a different annual amount.

The not-for-profit health fund now provides two medical gap arrangements for doctors– Fully Covered and Opt-in/Opt-out Known Gap.
Fully Covered: HBF patients have no out-of-pocket costs for eligible private hospital services.
Opt-in/Opt-out Known Gap: Specialists have the flexibility to adjust their fee for each individual patient.

Contact HBF for the list of HBF Member Plus Hospitals that participate in their gap scheme.

Nib MediGap

Nib agrees to pay an extra amount that exceeds the standard 25% schedule fee when you doctor participates in the MediGap arrangements. Review the Nib’s MediGap Network Schedule of Benefits to determine the maximum amount they’ll pay under your gap cover.

AHM GapCover

AHM GapCover is designed to help eliminate or reduce your out-of-pocket costs for in-hospital specialist charges that exceed the MBS fee. If your specialist participates in GapCover, the maximum out-of-pocket medical expenses you’ll pay is $500 per doctor’s fee for each hospital stay.

HCF No-Gap or Known-Gap scheme

HCF gap cover includes an extensive network of providers and hospitals throughout Australia to help you minimise out-of-pocket costs for doctors and specialists’ fees inside the hospital. Their no-gap cover results in no cost to members, while their known-gap is capped at $500.

Access Gap Cover from HIF

HIF’s AccessGap scheme enables members to access 30,454 doctors and specialists participating in locations all over Australia. By using the scheme, participating doctors and hospitals receive a combined payment from Medicare and HIF when the cost is higher than the MBS fee.

5 Ways to reduce your out of pocket expenses

Frequently Asked Questions and Answers

Some insurers have claim processing systems, where claims can be submitted directly by your doctor. Generally, however, to claim you need to send the account directly to the health insurance provider. Alternatively, you might be able to claim electronically via the fund’s online billing process. Benefits are then usually paid directly into your bank account via EFT.

You might want to contact your doctor or the specialist and inquire about their fees before you book an appointment or schedule treatment.

Generally, doctors will provide you with a breakdown of their expenses, including the amount Medicare and your health fund will cover.

Gap cover is generally included in your Hospital insurance policy at no extra cost. However, it might depend on your policy type and the level of cover you’ve purchased.

No. Gap cover usually does not apply to your hospital excess payments or co-payments. These costs are generally paid from your pocket.



Megan has extensive experience writing about health and life insurance in Australia. Megan has a special interest in health and wellness. She relies on her background in counselling psychology to convey the latest findings in a manner that is most beneficial to ComparingExperts readers. In every article she writes, Megan aims to uphold the standards of the Private Health Insurance Intermediaries Association (PHIAA) which ComparingExpert is part of.

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