How Medicare and Private Health Funds Cover Surgery Costs

Understanding how Medicare and private health insurance work together can help you better plan for the financial aspects of your surgery. Let’s take a closer look at how the system works:

1. Medicare Scheduled Fee: Every procedure listed under Medicare has a scheduled fee set by the government. For example, let’s say the scheduled fee for your surgery is $1,000. This fee is a standard amount that Medicare assigns to each type of operation or treatment.

2. Medicare Coverage (Without Private Health Insurance): If you only have Medicare (without private health insurance), Medicare will reimburse you 75% of the scheduled fee. In our example, you would receive $750 back from Medicare. However, this only covers the procedure itself—it does not include costs such as hospital stays, which can add up quickly.

3. Private Health Fund Coverage (With Insurance): If you have private health insurance, your health fund will typically cover 100% of the Medicare-scheduled fee. In our example, that means your insurer would cover the full $1,000. In some cases, private health funds might even pay more than the scheduled fee—sometimes up to 120% or 140%. This means you could get $1,200 to $1,400 back, depending on your policy.

4. Hospital Costs: Private health insurance becomes particularly important when it comes to hospital fees. Medicare does not cover private hospital costs, which can be quite substantial, especially for procedures that require an extended stay or specialized care. Your private health insurance will typically cover most of these costs, though you might have an excess or out-of-pocket payment depending on your plan.

5. Excess and Out-of-Pocket Costs: While private health insurance will generally cover a large portion of the expenses, there may still be some out-of-pocket costs, such as an excess (the amount you need to pay towards your hospital stay). This varies depending on your health fund and the specifics of your policy.

6. Why Private Health Insurance Matters: Having private health insurance is highly recommended for anyone undergoing a surgery covered by a Medicare Benefits Schedule (MBS) item number. It helps significantly with both the procedure and hospital costs, making the entire process more affordable. Without it, the out-of-pocket expenses for private hospital stays can be quite high.

In summary, while Medicare helps cover some of the costs for medically necessary surgeries, private health insurance provides additional coverage that can make a big difference—especially when it comes to hospital fees. Make sure to check with your private health fund before surgery to understand exactly what they will cover.

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ADULT content. Dr Bernard Beldholm M.B.B.S B.Sc(Med) FRACS is a Specialist General Surgeon (AHPRA Medical Registration nr: MED0001186274). Any surgical or invasive procedure carries risks. Before proceeding, you should seek a second opinion from a qualified health practitioner. Results, recovery & potential complications will vary for each individual patient. Photos & videos featured are not a guarantee that your results will be the same & do not guarantee a particular surgical outcome. Content on our Instagram page & other social media pages is published with the consent of our patients. The content featured is general in nature and does not constitute medical advice. Immediate post-op results may differ from the final result.