nib launches Known Gap plan to reduce out of pocket treatment costs for members

nib will introduce more flexibility in out-of-pocket costs for in-patient treatments for members, as part of an overhaul of its MediGap network. 

Under the new plan, more than 40,000 MediGap-registered specialists will be able to offer a $500 maximum out-of-pocket cost (Known Gap) for hundreds of hospital treatments Australia-wide - including anaesthesia, obstetrics and gynaecology, paediatrics and child health, surgery, ophthalmology and psychiatry.  

nib expects more specialists will use MediGap if they can offer Known Gap for some services. MediGap is discretionary, meaning registered providers can choose to participate on a case-by-case basis. Up until now, specialists could only offer No Gap. Patients paid the gap left after the Government co-payment. 

From 1 October 2024, MediGap network will allow registered providers to charge the Known Gap (up to $500), as well as No Gap. The change will affect more than a million nib members with hospital cover. 

With more providers using MediGap, nib estimates average out of pocket costs will fall, saving up to $8.1m a year for members. It is especially useful for providers that have fixed price treatments that were previously ineligible for MediGap. 

“We believe this change will provide greater cost certainty to members and better support specialists in managing the needs of their practices and patients,” said nib Chief Executive, Australian Residents Health Insurance (arhi), Ed Close. “We have listened to our providers and responded, while focusing on reducing out of pocket costs for members facing cost of living pressures.” 

Upgrades to nib’s Find a Provider tool will help nib members find specialists who are registered in MediGap, providing information on how often they offer No Gap/Known Gap treatments and typical out of pocket costs. Find a Provider averages 5000 searches a month for medical specialists. In FY24, Find a Provider had more than 168,000 unique visitors, or more than 369,000 total searches.   

Honeysuckle Health, a joint venture between nib Group and Cigna Corporation, manages MediGap on behalf of nib members, and the changes will apply to members of nib and some nib partner brands with hospital cover. 

“Medical specialists have asked for this flexibility in billing patients, making it more likely they will use their discretion to offer a range of options to members,” Mr Close said. “We encourage our members to talk over the options with their treating specialist.”