Decoding the language of private health insurance

We’ve translated some of the most perplexing terms from our health system.

Written by Medibank

If you’ve ever made a claim or thumbed through your cover summary, you may have come across a few strange terms and acronyms; in-patient, out-patient, AGR, GapCover… it can seem as though the private health industry has its own language. That’s why we’ve created this handy A-Z list of some of the most commonly used terms translated into plain English to help you navigate the system.

Annual limit

An annual limit is the maximum amount of benefits we pay towards services and/or items within a calendar year. A combined limit is an annual limit that applies to a group of services and/or items.

Australian Government Rebate (AGR)

A rebate provided by the Australian Government to help Australians reduce the cost of their health insurance premiums. The rebate is means tested, and applies only to the base premium of a residential cover.

Read more about how the AGR is calculated here.


The amount of money we contribute towards the cost of an item or service included under your cover. The benefit we pay for services or items is likely to be less than your annual limit and less than your provider’s charge, which means you may have out-of-pocket expenses to pay.


This is the amount you pay towards your hospital admission (same-day or overnight) before we pay any benefits. The excess applies per member, per calendar year and it doesn’t apply to child, student or adult dependants on a family membership. Some hospitals may require you to pay the excess at the time of admission.

Excluded services

A service that we don't pay benefits towards, including hospital accommodation or in-hospital medical service like specialists' fees.


Extras refer to the range of health services or items that are generally not covered by Medicare. This includes services like dental, optical, physiotherapy, remedial massage and more. Extras cover helps pay for healthcare you receive outside of hospital.


Refer to ‘out-of-pocket expense’.


Medibank’s GapCover is designed to help eliminate or reduce out-of-pocket expenses for in-hospital doctors' charges. Doctors can choose to participate in GapCover on a claim-by-claim basis. So it is important to check upfront with each doctor involved in a treatment if they will participate in GapCover for all of their claims. Out-of-pocket costs may still apply. GapCover doesn't apply to diagnostic services or to some other services.

You can search here for doctors who have previously participated in Medibank’s GapCover, or ring us on 132 331.

Hospital cover

A cover that helps with the cost of a member's hospital stay as a private patient including:

  • hospital accommodation on the ward,
  • in-patient medical treatment; and
  • associated appliances provided during the admission e.g. approved internal prostheses


A person who is admitted to hospital to receive medical care or treatment.

Included services

A service that we pay benefits towards, including inpatient hospital accommodation (overnight and same-day) and medical services subsidised by Medicare; however, out-of-pocket expenses can still apply.

Informed Financial Consent

The provision of cost information to patients in writing, including notification of likely out-of-pocket expenses, by all relevant service providers. Where possible, this is provided prior to admission to hospital or provision of treatment.

If a procedure is on the cards, we recommend you call us on 132 331 to discuss the financials and potential out-of-pocket expenses involved. Remember to ask your specialist or hospital for the MBS item numbers for your procedure.

Lifetime Health Cover (LHC) loading

An Australian Government scheme designed to encourage people to take out hospital cover by the time they are 31.

Read more about Lifetime Health Cover loading.

Medicare Benefits Schedule (MBS)

A list of medical services for which Medicare pays a benefit and the rules that apply to the payment of those benefits. Each service has a fee that has been set by the Australian Government for the purpose of calculating the Medicare benefit payable for that service.

Medicare Levy

A compulsory tax paid by all Australian residents that’s automatically deducted from your annual taxable income if you earn over $26,121 per year. It’s used to help fund Medicare.

Medicare Levy Surcharge (MLS)

An additional surcharge, on top of the Medicare levy, which Australian taxpayers are charged if they earn above a certain income threshold and do not hold residential hospital cover.

Read more about the Medicare Levy Surcharge (MLS) here.

Members’ Choice providers

One of the following:

  1. an extras provider Medibank has negotiated with so you won’t be charged more than the maximum agreed price, or
  2. a hospital Medibank has an agreement with to help minimise members' out-of-pocket expenses.

Out-of-pocket expense

An Out-of-Pocket Expense (previously known as the ‘gap’) is a difference between the fee charged by a provider (a surgeon, dentist, or physiotherapist etc.) and the benefit Medibank will pay for the service. The term ‘gap’ will continue to be used for our GapCover scheme.

Outpatient services

Medical care or treatment received when a person is not admitted to hospital. This includes visits to an emergency department, specialist or general practitioner (GP). Private health insurers are not permitted to pay benefits towards these services.

Pre-existing condition (PEC)

An ailment, illness or condition that in the opinion of a medical practitioner appointed by Medibank, the signs or symptoms of that ailment, illness or condition existed at any time in the period of 6 months prior to the day on which the person became insured under the policy or changed their cover.


An amount of money that must be paid towards a membership for a specified period of cover.

Restricted services

A service where we pay the minimum amount set by the government for hospital accommodation.

Waiting period

A waiting period applies when you join Medibank, or change your cover to include new or upgraded services. We won’t pay benefits for any items purchased or services received while you are serving a waiting period.

Written by Medibank

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