I have health insurance – and my surgery is still $11k

I have health insurance. I have had health insurance for many, many years. If I were to add up the premiums, I’d find that I have spent tens of thousands of dollars on my health insurance policy.

Now I need to use it – and I’m horrified at my out of pocket expenses.

I need to get an operation to fix an umbilical hernia, which is not urgent or life-threatening, but if it becomes strangled then it very quickly could become urgent or life-threatening.


I have a couple of options: join the waitlist for an operation in the public system, or go private.

Through the public system I could be waiting years; as I said, my operation isn’t urgent, so I would be right at the bottom of the priority list.

Privately, however, is going to cost me a small fortune.

The total cost of my surgery in a private hospital is around $24,000. That covers $15,000 for the surgeon’s fee, $1,500 for the anaesthetist, $500 for my health insurance excess, and $7,000 for my hospital stay.

Medicare will cover around $2,000 of the surgeon’s costs, and should rebate a small amount towards the anaesthetist. I thought my health insurance would cover pretty much the rest of my medical procedure – but I was sadly mistaken.

Whilst the hospital accommodation portion is completely covered, my surgeon’s fee is not. My insurer will pay a little more than Medicare, or $3000, towards this cost. This means I have to foot the remaining $10,000 privately, along with the cost of the anaesthetist.

My total out of pocket expense will be around $11,000, and I have top hospital cover!

I could try to find a “cheaper” surgeon, but is this really an area where we want to favour price over quality?

John Menadue, founding chair and board member of the Centre for Policy Development, says private health insurance “threatens our universal health system through seriously weakening the ability of Medicare as a single funder to control costs”.

“We have seen the enormous damage that PHI has wrought in the US. We are steadily going down the same dangerous path,” he argues.

I have to say I agree. Our health system is wildly confusing, expensive and hard to navigate – and it’s little wonder so many people think private health insurance is a scam that does very little to deliver better health outcomes.