A look into what Australians are spending for out of pocket medical costs

A look into what Australians are spending for out of pocket medical costs


Over the years out of pocket costs for health care have gradually been rising for Australian patients. While some of the trend has been due to an increase in the fees structure of medical service providers as well as the rising cost of pharmaceuticals, on the flip side the trend is impacting ready access to health care as well.

There has been a growing difference between the amount that Medicare covers or the scheduled fees and the actual amount that medical practitioners charge for their services. To meet the gap between the two, many patients need to finance the funds out of their own pockets to proceed ahead with the treatment that they seek. The result of this gap between Medicare coverage and service charges has created a group of patients who are not able to pay for needed health care services or are simply delaying seeking treatment because of cost barriers.

Australians Are Struggling With Medical Expenses

Increasing out of pocket costs for health also pose a serious problem for patients with chronic or long term medical conditions, especially those belonging to the low income group. This group is often in need of assistive devices, aids and appliances for their normal functioning. They may also be looking into health services such as massage therapy and pain relief; services that may not be fully funded by Medicare. In addition, wait times for public patients can be significantly long, compelling patients to seek private treatment which of course, will have higher fees attached to it.

Even patients who have access to private health insurance and can choose facilities and practitioners of their choice, end up paying significant out of pocket costs for their health care every year.

According to the Australian Institute of Health and Welfare, it is estimated that Australians spend about $24.3 billion a year covering out of pocket expenses for health care; which comes to about 20% of Australia’s total health expenditure. The figure can also be translated as an average of about $1,082 for every person who seeks health care. It is also reported that Australians spend 3.2% of their household expenditure on health care services, the funding for which comes out of their own pockets.

What Are Australians Spending Their Money On?

The bulk of these personal expenses is spent on medication not covered by Medicare. This can include both prescription and over the counter drugs. According to an AIWH study conducted in 2010-11 the total spent on such medication amounted to $8 billion. The other major out of pocket expense for Australians seeking health care was spent on the charges for receiving medical services.

Among this, specialist fees was the biggest cost factor with $254 million paid out in this category. Privately insured patients were observed to have paid way more for these services. Out of the $254 million, $67 million was compensated by Medicare and $47 million by private health insurers. The remaining gap of $140 million was paid out of the patients’ personal funds.

Private patients also ended up paying around $2.5 billion for accessing hospital services in both private and public hospitals.


1) Out-of-pocket payments for health care—finding a way forward: http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook44p/OutOfPocketPayments

2) Can’t escape it: the out-of-pocket cost of health care in Australia: https://www.mja.com.au/journal/2013/199/7/can-t-escape-it-out-pocket-cost-health-care-australia

3) http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22library%2Fprspub%2F2422893%22

4) Consumers Health Forum of Australia Health Voices Journal Issue 12 April 2013: https://www.chf.org.au/pdfs/chf/HealthVoices_APRIL_WEB.pdf