The Increasing Economic Load on Australian Patients
Australian healthcare is becoming more unaffordable, particularly for surgical patients. Out-of-pocket costs not paid by Medicare or private health funds have grown by 71% in the last five years, Private Healthcare Australia says. Those rising costs reflect a wider trend: the widening gap between coverage and cost of care.
Private health premiums continue to rise, yet the scope of what they cover is shrinking. Patients often find themselves footing thousands of dollars in additional fees, even for procedures that are medically necessary. Many Australians are now turning to external finance solutions such as medical loans for surgery to bridge this gap.
Across Australia, from Brisbane to Perth, families are increasingly using personal loans, early super withdrawal, and Buy Now Pay Later (BNPL) products specifically designed for the healthcare sector to pay for medical treatment.
Online lending company Loan Owl, which provides purpose medical loans, has experienced a significant increase in applicants seeking to pay for elective and necessary procedures due to cost restriction.
Medical Loans: A Rising Solution
Surgical loans in Australia are becoming a common short-term solution for patients who lack the funds or the time to wait and pay for treatments. The unsecured personal loans are tailored to cover all types of medical bills and come with favorable repayment terms..
Typical procedures funded through medical loans include:
- Orthopaedic surgeries, such as hip and knee replacements
- Cosmetic and bariatric (weight-reduction) surgery
- IVF and fertility treatments
- Dental and maxillofacial work
Although BNPL products can seem attractive for minor procedures, medical loans provide greater loan amounts and longer repayment terms. They enable patients to have surgery without long waiting lists in the public system, particularly for non-emergency but quality-of-life-enhancing surgery.
Others are attempting to lower patient out-of-pocket costs. HCF’s No-Gap Joints program is one, covering some joint replacements in member hospitals in full. Yet the program is only offered in some locations and hospitals.
Risks and Considerations
While medical loans offer timely access to care, they carry financial implications. Terms can extend from 12 months to five years, and interest rates generally range from 6% to 20% depending on the applicant’s credit score and lender policies. Fees for late payments or early repayment may also apply.
Some Australians have also tapped into their superannuation to cover surgeries, particularly when facing delays in the public system. However, this practice has drawn criticism from regulatory bodies. Private Healthcare Australia’s CEO Dr Rachel David warned:
“Allowing tens of thousands of people to drain their superannuation for medical and dental treatment each year is driving up costs for all consumers and should be stopped.”
Consumers are urged to review all borrowing terms thoroughly. Not all lenders are equally transparent, and some may obscure the true cost of the loan through confusing fee structures. Tools from platforms such as Loan Owl allow prospective borrowers to calculate repayments upfront, offering more transparency.
Regional Disparities and Access Issues
Access to healthcare, and the associated costs, varies greatly depending on geography. In Queensland, a breakdown in negotiations between Healthscope and major insurers resulted in some private hospitals charging patients full fees for procedures, with no insurer rebates.
This is especially the case in rural and regional communities. In certain towns, for instance, maternity wards have been shut down, and pregnant women have been forced to travel more than 150 kilometers to reach safe birthing units.
These policy and infrastructural weaknesses magnify the role of medical loans as a critical financing vehicle, not simply for convenience, but for basic access. For many, the only realistic option for essential treatment is borrowing.
Policy Outlook and the Case for Reform
The increasing dependence on financial products like medical loans for surgery in Australia highlights deeper systemic issues in health funding.
Although the government has focused efforts on controlling insurance premiums, less attention has been paid to addressing the out-of-pocket gap experienced by patients. Key policy proposals gaining attention include:
- Stricter guidelines for early access to super for medical purposes
- Improved transparency requirements for private insurers around gap payments
- Expansion of no-gap schemes nationally
- The introduction of a standardised national framework for medical loans, with clear consumer protection standards
What Patients Can Do
While structural reforms are debated and developed, individual patients must navigate the current environment using available tools and information:
- Compare loan options thoroughly. Use comparison rates rather than base interest rates to understand the true cost. Providers allow borrowers to explore different scenarios before committing.
- Check private health cover for exclusions. Even high-tier policies may have gaps in coverage or waiting periods.
- Speak with a financial counsellor. Free and independent advice can help avoid costly mistakes.
- Avoid using super funds prematurely. Unless facing dire circumstances, early super access may compromise long-term retirement savings.
Cost Breakdown and Financial Example
Treatment Type
Average Out-of-Pocket Cost
Average Loan Repayment (12 months)
Knee replacement
$9,500
$825/month
IVF cycle
$6,500
$580/month
Wisdom tooth surgery
$2,300
$210/month
Weight loss surgery
$10,000
$880/month
Based on an 11% annual interest rate and no upfront deposit using common loan platforms.
Broader Economic Impacts
Higher medical borrowing also aligns with overall household cost-of-living constraints across Australia. Wages have not risen at the rate of inflation, and basic services like health, energy, and housing are consuming a greater share of income, according to the Australian Bureau of Statistics (ABS).
This financial squeeze is evident across different demographics. Younger Australians are taking on debt earlier, and older Australians are delaying treatment due to affordability. The cumulative impact extends to national productivity, workforce participation, and long-term health outcomes.
The need for transparent, well-regulated access to medical finance is likely to grow. While services like those from Loan Owl are filling an important gap, they also underscore the urgent requirement for government oversight and a more resilient public health model.
Final Thoughts
Rising surgery costs and patchy health coverage are pushing more Australians toward borrowing. Emergency loans for medical surgeries offer a crucial lifeline for timely care but come with significant responsibilities.
With proper regulation, consumer education, and financial support mechanisms, medical loans can be part of a fair and functional healthcare ecosystem. Until then, Australians are left to manage a fragmented system with limited transparency, where geography and income determine access.
Responsible lending practices and informed decision-making, supported by platforms like Loan Owl, can help bridge the gap between need and affordability without pushing patients deeper into debt.