What is the cost of staying in a public hospital?
Thanks to Medicare, public hospital treatment in Australia is free to Australian and New Zealand citizens, most permanent residents and those from countries with reciprocal agreements. You can also opt to be treated in a private hospital, potentially allowing you to skip long waiting lists for elective surgeries, but this will come at a cost, which can be high, depending on the treatment you're receiving, how long you stay in hospital, and the doctors and specialists you see. This is where private health insurance comes in.
What is the cost of staying in a private hospital?
When you’re treated in a private hospital for a procedure covered by your health insurance, there are two main costs to look out for, your excess and your gap payment.
- The ‘gap’ refers to the difference between the fees charged by your doctors, and what Medicare and your private health insurance pay. Depending on your policy, some or all of this amount could be covered under your insurer's gap cover scheme when your treating doctors have an agreement with your fund.
- Your excess is a set amount you pay towards your hospital costs, which is outlined in your policy documents. You may also need to make a co-payment for each day you’re admitted instead of, or in addition to your excess. If your health fund doesn’t have an agreement with your hospital, you could face significant out-of-pocket costs.
Before you book in for private treatment, it may be worth reading your Private Health Information Statement (PHIS) to understand your cover and contacting your health fund to check which doctors they have agreements with.
Staying in a public hospital as a private patient
If you’re admitted to a public hospital, you may still be asked if you would like to be registered as a private or a public patient. If you choose to be a private patient, you may receive additional benefits such as access to a single room and your choice of doctor (provided they are available), depending on the hospital.
The cost of staying in a public hospital as a private patient is the same as the costs for a private hospital. It can be beneficial to clarify the extent of your cover with your health insurance provider, and the costs charged by the hospital for a private patient, to help you determine whether you will be out of pocket.
What does Medicare cover in public hospitals?
Medicare covers costs of public hospital services for public patients in Australia, including:
- Clinical services
- Doctor and specialist fees
- Accommodation and food (usually shared rooms)
- Medication prescribed in hospital
- Operating theatre fees
It’s worth noting that procedures covered by Medicare must be listed on the Medicare Benefits Schedule (MBS).
What costs doesn’t Medicare cover?
There are some hospital-related expenses that Medicare may not cover, such as the cost of ambulance services. Depending on where you live, your state or territory government may cover this.
For example, the ambulance service in Queensland is fully subsidised by the Queensland Government, making it free for local residents, whereas in Victoria, residents who use the service may be out of pocket unless they have an Ambulance Victoria membership, a concession entitlement or a health insurance policy that provides cover for ambulance services.
Other states and territories have varying policies, so it is important to check local ambulance service coverage.
Additionally, while public hospital treatment is free for public patients, some minor charges may apply, such as optional services like TV, internet, telephone, and parking fees, which are typically not covered.
How to prepare for the costs of staying in hospital
If you’re planning an admission to a private hospital, it can be a good idea to check with your doctor or the hospital administration staff about the costs involved with your stay. Some of the costs to consider includes:
- Intensive care
- Hospital accommodation
- Operating theatre fees
- Medication, dressings and bandages
- Blood tests, X-rays or CT scans
- Specialists’ fees.
It may also be valuable to talk with your health fund to understand what you’re covered for, and to check which doctors and hospitals they have existing agreements with. Consider asking about any waiting periods, exclusions, co-payments or excesses that may apply. If you’re not happy with the level of cover you have, you can always compare other health insurance policies on Canstar’s database.
How much does day surgery cost?
The cost of day surgery varies depending on the procedure and whether or not you’re being treated as a public or private patient.
- Public patients: If your procedure is included in the MBS and you’ve been admitted as a public patient in a public hospital, then Medicare will cover the cost fully.
- Private patients: Medicare may cover 75% of the MBS fees, with your private health insurance typically covering some or all of the remaining cost. Your level of private health insurance will determine how much your insurer will cover.
Common day surgeries include cataract removal, tonsillectomy, colonoscopy, and arthroscopy. Costs in private hospitals for these procedures can vary significantly, depending on complexity and location.
Is hospital cover worth it?
This will ultimately depend on your personal needs and circumstances. Hospital cover can help reduce your out-of-pocket costs if you’re treated as a private patient in a public or private hospital (depending on your policy). Another benefit of hospital cover is it usually means skipping long public hospital waiting times and that can give you more choice in who provides your treatment.
Having an appropriate level of private health insurance can also help when it comes to tax time, as you may receive a rebate and avoid paying the Medicare Levy Surcharge (MLS). For the 2025/26 tax year if you earn over $101,000 a year or $202,000 as a family (plus $1,500 for each dependent child after your first) you will have to pay the MLS. However, if you have hospital cover with an excess of $750 or less as a single person, or $1,500 or less as a family, you may avoid paying the MLS entirely.
