Australia’s healthcare system is divided into two distinct sectors. Private and public. With the public system, public patients are covered by Medicare and often do not have many out-of-pocket fees. The downside to Medicare is that they do not cover every procedure. The private system has more freedom in choice and a faster expectation regarding the surgery date. The downside to this system is that it is often expensive and requires a good health insurance policy that will cover all the associated costs that Medicare cannot.
Key facts
- Surgeries are classified into three groups: Urgent, elective and cosmetic.
- Speaking with your health insurance provider before the procedure will assist you in understanding the possible out-of-pocket costs you may owe.
- The type of surgery you are having will generally the cost and what’s covered by Medicare and your private health insurance.
Compare Health Insurance Quotes
Protect what’s most important to you. It’s easy, convenient and free!
By clicking ‘Compare & Save Now’, you are accepting our Terms of Use, Privacy Policy and consenting to us contacting you about the products and services provided. Please consider the PDS before purchasing any products.
Understanding Surgery Costs in Australia
Surgeries are classified into three distinct groups. Urgent, elective and cosmetic. Understanding each surgery type will assist you in knowing if your health insurance policy covers it. Let’s look closely at these surgery types, the difference between each and why they are necessary.
- Urgent surgeries are regarded as life-threatening and immediately required. These life-threatening surgeries prevent any further damage to the body by removing or fixing the damaged area. An example of an urgent surgery would be trauma to the body or acute appendicitis.
- Elective surgeries can often be considered life-threatening or harmful to your health, but are not immediately required. Much like urgent surgeries, these surgeries aim to improve the patient’s quality of life. An example of an elective surgery would be removing kidney stones or removing warts and moles.
- Cosmetic surgery is often done to improve a patient’s self-confidence, appearance or self-esteem. These surgeries are not life-threatening and can be rather expensive. An example of cosmetic surgery would be otoplasty (ear surgery) or rhinoplasty (nose surgery).
Medicare and surgery
Medicare is free health insurance for all Australian residents. Medicare assists in covering most fees at a public hospital and some at a private hospital. Medicare does not cover the costs of accommodation and theatre at private hospitals. Private health insurance is important because it creates a safety blanket between you and unforeseen costs. Different health insurance policies are tailored to different requirements. Before any procedure, you must speak to your health insurance provider to understand the associated coverage and what out-of-pocket costs can be expected.
Private Surgery and Associated Costs
Private health insurance covers any costs that Medicare does not. This may include accommodation, theatre and ambulance costs. Private health insurance offers three packages: Hospital, Extras and Combined. Hospital policies cover costs associated with being a private patient in a private hospital. Extras policies cover out-of-hospital costs that Medicare doesn’t cover, as well as ambulance cover for those who live in a state that does not provide ambulance cover. Combined cover is an option that merges both hospital and extras policies. Identifying your personal requirements will assist you in choosing the health insurance policy that meets your needs.
When the costs of your procedure are larger than your policy’s coverage, you will often need to pay for it out-of-pocket or as a copayment. The medical gap scheme assists you in this situation. This is usually a result of specialist fees, bulk billing availability and the services you need. The amount owed is referred to as ‘the gap’. Most private health insurance providers have policies that include coverage for any gaps that may occur. The amount of assistance provided for gap costs varies between health insurance providers.
Advantages of private health insurance
- Assists in covering care received as a private patient in private hospitals.
- Ability to choose your surgeon and doctor.
- Gap coverage for any necessary out-of-pocket costs.
- Wait time for procedures at private hospitals is often shorter than at public hospitals.
Analysis of Costs for Top 10 Surgical Procedures
Cataract Surgery
Cataract surgery is a procedure that involves the removal of the eye’s lens and replacing it with an artificial lens. The average cost of this procedure in Australia is around $2000 in specialist fees and $2400 in hospital fees. Private health insurance will typically cover the full hospital fee, depending on your coverage type.
For private patients requiring cataract surgery with a glaucoma stent in a private hospital, the average out-of-pocket payment is $490 and $370 for private patients needing general cataract surgery. The average expected costs for uninsured patients can range from $1700 to $2500 per eye. The cost may fluctuate depending on the chosen artificial lens, hospital, and location. Medicare provides cover for this procedure. Medicare will pay for 80% of the involved costs, with the patient needing to pay the remaining 20%.
Gastroscopy
Gastroscopy is a procedure that utilises a small and thin flexible tube to examine the upper digestive tract. This procedure is used to visualise the upper part of the gastrointestinal tract and rule out possible conditions such as peptic ulcers and gastritis. The average cost of this procedure in Australia is around $940 for specialist fees and $530 for hospital fees.
Private patients requiring this procedure receive an average out-of-pocket cost of $140. The highest average out-of-pocket cost for the procedure is $370. This out-of-pocket cost will fluctuate based on your policy. Medicare will pay an average of $420 towards the procedure, with the rest being covered by your private health insurer.
Knee Replacement
Knee replacement surgery involves the removal and replacement of diseased, worn-out or damaged knee joint areas. The replacement is usually an artificial piece that acts just as a knee joint would and lowers the overall pain a patient may feel while restoring movement to the designated area. The average out-of-pocket cost of this procedure in Australia is around $4,800 for specialist fees and $ 18,000 for hospital fees.
Private patients requiring this procedure have an average out-of-pocket cost of $680. The highest average out-of-pocket cost for the procedure is $3900 but fluctuates based on the chosen policy.
Heart Angiogram with or without Heart Catheterization
A heart angiogram is a procedure in which an X-ray is used to view the blood supply to the heart. This is to check if the patient has any heart-related issues that need rectifying. The average out-of-pocket cost for this procedure is around $2000 for specialist fees and $ 4,200 for hospital fees.
Private patients requiring this procedure have an average out-of-pocket cost of $40. The highest average out-of-pocket cost for the procedure is $490.
Cesarean Section
A cesarean section, also known as a C-section, is a pregnancy-related procedure that allows the baby to be delivered through an incision made on the mother’s abdomen. This usually occurs when the healthcare provider believes it is safer for the mother, baby, or both. The average out-of-pocket cost for this procedure is around $ 3,500 for specialist fees and $ 7,900 for hospital fees.
Private patients requiring this procedure have an average out-of-pocket cost of $450. The highest average out-of-pocket cost for the procedure is $570.
Cholecystectomy
A cholecystectomy is a surgical procedure to remove a patient’s gallbladder. This surgery is often done to remove gallstones and any complications they may cause. The average out-of-pocket cost for this procedure is around $2,800 for specialist fees and $4,500 for hospital fees.
Private patients requiring this procedure have an average out-of-pocket cost of $400. The highest average out-of-pocket cost for this procedure is $1,200.
Coronary Artery Bypass Graft (CABG)
A coronary artery bypass graft is a surgical procedure that improves oxygen supply and blood flow to the heart. This surgery is usually done to assist with coronary artery disease, which causes a buildup of plaque in the heart’s arteries. The average out-of-pocket cost for this procedure is around $15000 for specialist fees and $ 35,000 for hospital fees.
Private patients requiring this procedure have an average out-of-pocket cost of $470. The highest average out-of-pocket cost for this procedure is $1,600.
Hip Replacement Surgery
A hip replacement surgery is a procedure in which damaged, diseased or worn-out hip joint areas are removed and replaced with an artificial piece. The artificial piece works in the same manner that a healthy hip joint would and aims to reduce pain in the patient’s hip area while also increasing the area’s mobility. The average out-of-pocket cost for this procedure is around $ 5,000 for specialist fees and $ 20,000 for hospital fees.
Private patients requiring this procedure have an average out-of-pocket cost of $690. The highest average out-of-pocket cost for this procedure is $ 4,000.
Breast Biopsy
A breast biopsy is a procedure in which a sample of the breast tissue is removed and tested for abnormal cells. This test rules out the possibility of breast cancer or any other condition. The average out-of-pocket cost for this procedure is $ 2,400 for specialist fees and $1,900 for hospital fees.
Private patients requiring this procedure have an average out-of-pocket cost of $500. The highest average out-of-pocket cost for this procedure is $1 100.
Ventral Hernia Repair
A ventral hernia repair is a surgical procedure in which the surgeon makes an incision into the abdomen above the hernia and pushes any protruding intestines back into the abdomen to repair the muscle wall. The average out-of-pocket cost for this procedure is $1 800 for specialist fees and $3 300 for hospital fees.
Private patients requiring this procedure have an average out-of-pocket cost of $380. The highest average out-of-pocket cost for this procedure is $ 1,000.
Compare common surgeries
Surgery type | Specialist Fees | Medicare Coverage | Insurer’s Payment | Patient’s Payment | Hospital Fees |
Cataract surgery | $2,000.00 | $840.00 | $770.00 | $370.00 | $2,400.00 |
Gastroscopy | $940.00 | $420.00 | $370.00 | $140.00 | $530.00 |
Knee Replacement | $4,800.00 | $1,900.00 | $1,800.00 | $2,900.00 | $4,200.00 |
Heart Angiogram with or without Heart Catheterization | $2,000.00 | $1,000.00 | $800.00 | $40.00 | $7,900.00 |
Cesarean Section | $3,500.00 | $1,000.00 | $2,000.00 | $450.00 | $4,500.00 |
Cholecystectomy | $2,800.00 | $1,200.00 | $1,100.00 | $400.00 | $35,000.00 |
Coronary Artery Bypass Graft (CABG) | $15,000.00 | $7,400.00 | $6,600.00 | $470.00 | $20,000.00 |
Hip Replacement Surgery | $5,000 | $1,900.00 | $1,900.00 | $690.00 | $1,900.00 |
Breast Biopsy | $2,400.00 | $1,000.00 | $770.00 | $500.00 | $1,900.00 |
Ventral Hernia Repair | $1,800.00 | $690.00 | $660.00 | $380.00 | $3,300.00 |
Source: Medical Costs Finder (October 2023; The prices above are estimates for specialists fees; Please refer to your medical professional for an accurate cost estimation)
How Private Health Insurance Can Assist with Surgery Costs
Private health insurance is designed to assist patients with any fees that they may have during the course of the necessary procedure. Depending on the coverage type, this may include ambulance, extras, and hospital cover.
There may be an instance in which the total cost of the procedure is higher than the coverage provided by both Medicare and your Private Health Insurance Provider. Depending on your chosen provider, the policy will often provide assistance in the form of gap cover that partially or completely lowers the final amount that you will have to pay out-of-pocket. The assistance amount will vary based on the provider and policy that you have chosen.
How Medicare Works with Private Health Insurance
Medicare typically covers 75% of the Medicare Benefits Schedule (MBS) fee for procedures performed in private hospitals, but this doesn’t include hospital accommodation or theater fees. Private health insurance helps cover the remaining costs, but the level of coverage depends on your plan. It’s crucial to understand the limits of your policy, including any gaps you might need to pay out of pocket.
What is the Medicare Benefits Schedule (MBS)?
The Medicare Benefits Schedule is a list of medical services covered by Medicare, including surgery, and specifies the amount Medicare will pay for each service. When you have surgery, Medicare covers 75% of the MBS fee, and private health insurance typically covers the rest, though you may still have out-of-pocket costs if your specialist charges more than the MBS fee.
Frequently Asked Questions and Answers
How are surgery costs determined in Australia?
Three main types of surgeries could occur. Elective, emergency or cosmetic. Depending on the type of surgery needed, the location, the specialist, and the hospital itself, these factors will increase or decrease the overall cost of surgery in Australia.
What is the Medicare Benefits Scheme and how does it relate to surgery costs?
Medicare is a free Health Insurance that is provided to all residents of Australia. It covers the costs associated with public hospitals and most general procedures. Medicare also assists in lowering the total out-of-pocket cost that a patient may need to pay after their procedure.
How can Australians manage out-of-pocket costs for common surgeries?
Talking to your specialist beforehand will assist you in understanding the costs involved. It is also important to speak with your health insurance provider to ensure that the costs are covered and to verify the estimated amount that may be required.
What is the role of private health insurers in covering surgery costs, and how do they determine the amount to be paid?
Private health insurers cover the costs that Medicare does not. For private hospitals, this may include ambulance fees, theatre and accommodation. Each policy is tailor-made to fit specific requirements and as such, there may be certain limitations for each policy type. Understanding these limitations will ensure you are not caught off-guard with unexpected fees and out-of-pocket costs.
How does the cost of surgery in public hospitals compare to private hospitals in Australia?
Public hospitals are often cheaper than private hospitals. The downside to a public hospital is that the wait time is often longer and the patient does not have the option to choose their own specialist. Private hospitals are often more expensive but have faster surgery times and grants the patient the ability to choose their own specialist.