Out-of-pocket medical expenses have jumped dramatically, according to data released by the Australian Prudential Regulation Authority (APRA). The authority released its latest Quarterly private health insurance statistics report last week.
APRA’s report revealed that average out-of-pocket payment for hospital episodes in the December quarter was $410.67. This was an increase of 10.2 per cent compared to the same quarter the previous year. The increase over the December quarter was 2.6 per cent.
The gap for medical services varied across specialty groups, with the biggest being for plastic/reconstructive services, averaging $727.39.
Broken down by age group, the APRA report shows a significant increase in hospital benefits paid by private health insurers from age 50. The amount rises with increasing age, peaking in the 75 to 79-year-old age group.
Out-of-pocket medical expenses – how do they vary?
The release of APRA’s latest quarterly report was timely for me, coming last Wednesday. On that day I encountered a friend recovering from a knee replacement and had coffee with another friend who’d just had cataract surgery. The next day my neighbour headed into hospital for a gastroscopy.
My first consideration was, of course, their wellbeing, but later wondering what costs were involved gave me pause for thought. All three had private insurance, but to what level would their insurance cover these procedures?
While private insurance will cover part of the expense of hospital procedures, it will rarely cover the full gap. That gap in expenses must be paid by the patient. These are usually described as out-of-pocket expenses, but are also known as ‘patient payment’, ‘gap payment’ or simply a ‘cost’.
The surgery undergone by the three friends I came across last Wednesday represented some of the more common hospital procedures.
Joint costs for joints
Looking at knee replacements, non-hospital fees come in at an average total of $4800. These will include specialist fees, assistant surgeon fees, and anaesthetist fees. On average Medicare will cover $1900 of this cost, with private insurers tipping in $1800. Patients typically paid a difference of $680.
This does not include hospital fees, which incorporate accommodation, theatre, and medical devices. For knee replacements, those fees average about $18,000 but are generally covered mostly, if not in full, by insurers.
Not all those who had private health cover had out-of-pocket expenses. APRA figures showed that 32 per cent of insured patients incurred no associated cost.
Hip replacement fees follow a similar course, with out-of-pocket expenses averaging $690.
Interestingly, there is a significant difference in expenses between a hip arthroscopy and a knee arthroscopy. An arthroscopy involves a thin tube with a camera being inserted in the joint to enable treatment or diagnosis. For knees, the arthroscopy out-of-pocket average is $400, but for hips it is $1500.
Not just joints
Thinking back to my neighbour’s gastroscopy, the APRA figures show this procedure will set back the average privately insured patient by $140, while out-of-pocket expenses for a colonoscopy average $150.
Across the full spectrum of hospital procedures, average out-of-pocket costs vary greatly. Some examples include:
- Breast reconstruction $730-$960
- Coronary artery bypass graft $470
- Pacemaker $50
- Hysterectomy $500
- Varicose veins $300
Have you had a recent hospital procedure? How much of the cost was met by your insurer? Let us know via the comments section below.
Also read: Health insurers accused of overcharging for top-level hospital cover
Health disclaimer: This article contains general information about health issues and is not advice. For health advice, consult your medical practitioner.