Knee Replacement Costs in Australia: Medicare, Gap Fees & Out-of-Pocket

Public System (Medicare)

• No direct payout/compensation to patients for treatment.
• Public hospital admission: Zero cost for surgery, prosthesis, inpatient stay (fully covered).
• Wait times: Months to years (elective category).
• Out-of-pocket: Minimal – mainly PBS prescription co-payments for post-op meds.

Private System (With Private Health Insurance)

• Hospital cover required (gold/silver plus tier for joint replacement).
• Out-of-pocket costs ("gap"):
  • Surgeon/assistant/anesthetist fees above MBS schedule (can be $0–$5,000+).
  • Prosthesis gap (if prosthesis cost > insurer's agreed benefit).
  • Hospital excess/co-payment (per policy, typically $250–$750/admission).
  • Physiotherapy, aids, outpatient meds.
• Total typical out-of-pocket: $1,500–$6,000+ depending on surgeon, prosthesis, hospital, and policy.
• Advantages: Choice of surgeon, shorter wait, private room.

Key Terms

• MBS (Medicare Benefits Schedule): Government-set fee for each item.
• Gap: Difference between provider's fee and MBS rebate + insurer benefit.
• No-Gap / Known-Gap Schemes: Some insurers/surgeons agree to limit or eliminate gap.

Decision Factors

Urgency, surgeon preference, financial capacity, insurance coverage details. Always obtain informed financial consent (written estimate) before private surgery.