Knee Replacement Surgery: How Private Health Insurance Can Help

Knee replacement surgery is one of the most common types of joint replacement surgery in Australia, especially for older adults managing osteoarthritis or long-term joint damage. Each year, more than 53,500 knee replacements are performed to treat osteoarthritis across the country, and that number is steadily rising. In fact, by 2030, the number of procedures is expected to grow by 276%, according to projections from the Australian Orthopaedic Association.

For those experiencing joint pain, stiffness, and limited mobility, knee replacement surgery can offer relief and a better quality of life. But while the health benefits are clear, the financial side can be more complicated. Without the right private health insurance, the out-of-pocket costs can quickly add up, covering everything from surgeon fees to hospital stays and rehabilitation.

In this article, we’ll break down what you need to know about the cost of knee replacement surgery, how private hospital cover can help, and what support options exist. Whether you’re preparing for surgery or just starting to explore your options, understanding your cover could save you time, money, and stress.

How Much Does Knee Replacement Surgery Cost in Australia?

If you’ve been told you need a knee replacement, one of the first things you might wonder is:how much is this actually going to cost me?

The short answer is: it depends. But here’s what you need to know.

In Australia, the cost of knee replacement surgery in the private system usually falls somewhere between $20,000 and $30,000. That figure generally includes everything from the surgeon’s fee and hospital stay to the anaesthetist, prosthetic knee joint, and follow-up care.

If you don’t have private health insurance, you could be looking at covering that full amount out of pocket. That’s a big financial hit for most people, and it’s one of the main reasons why having hospital cover matters.

Even if you are insured, there can still be out-of-pocket costs, depending on your fund, your level of cover, and whether your surgeon charges above the standard fee. Some people end up paying a few hundred dollars extra, while others might get bills in the thousands.

In the public system, knee replacements are covered by Medicare, but there’s often a catch: the waiting list. It’s not unusual to wait over 12 months for elective joint surgery in the public system, which is why many Australians look to private hospitals for faster access.

The good news? Some private health funds – like nib, through its Clinical Partners Program – offer no-gap knee replacements with participating surgeons. That means you could pay nothing at all for the hospital part of the procedure (just your excess), saving you thousands.

So while the cost of knee replacement surgery in Australia can be high, the right health cover can make a huge difference – not just to your wallet, but also to how quickly you get the care you need.

What Factors Influence the Cost of Knee Replacement Surgery?

The total cost of knee replacement surgery can vary quite a bit from person to person. While we often hear average figures, the actual amount you pay depends on a few key factors (some of which are easy to overlook until you get the bill). Here’s a breakdown of what typically affects the hospital costs and surgical fees involved.

1. Surgeon Fees

Your surgeon’s fee can be one of the biggest components of the total cost. These fees aren’t fixed, and some specialists charge above the Medicare Benefits Schedule (MBS) fee. The gap between what’s charged and what your fund will cover can become an out-of-pocket expense – unless your surgeon participates in a no-gap or known-gap scheme with your health fund.

2. Anaesthetist Fees

Anaesthetists also set their own fees. If their charges exceed what your fund pays benefits towards, this can add hundreds (sometimes thousands) to your total cost.

3. Hospital Stay

A private hospital stay usually includes charges for the room, operating theatre, nursing care, meals, and equipment. The longer you stay, the higher the cost. Some health funds cover most or all of these costs, depending on your level of cover and whether the hospital is part of your fund’s network.

4. Prosthetic Knee Joint

The cost of the artificial joint (prosthesis) is included in the overall hospital bill. Medicare and most health funds have approved prostheses lists, which helps keep this cost predictable, but upgrades or specific brands may attract additional charges.

5. Rehabilitation

Recovery doesn’t end when you leave the hospital. You may need inpatient rehab, outpatient physio, or even a home-based program. Depending on your policy, some or all of this may be included. Programs like nib’s Clinical Partners may even allow you to recover at home with visits from a physiotherapist, potentially reducing both your hospital costs and the stress of extended inpatient stays.

6. Diagnostic and Follow-Up Care

Scans, pathology, post-op consultations, and follow-up imaging (like x-rays) can also add to the overall cost. Some of these services are billed separately from your hospital admission, so check whether they’re included in your cover. In summary, the total cost of knee replacement surgery is a combination of surgeon and anaesthetist fees, hospital costs, prosthetics, and ongoing rehab. The more you understand what’s included (and what’s not), the easier it is to avoid surprise bills and the better equipped you are to use your private health cover effectively.

Can Private Health Insurance Reduce Knee Replacement Costs?

Private health insurance can make a big difference when it comes to the cost of knee replacement surgery. The right hospital cover can reduce your out-of-pocket costs significantly or even bring them close to zero, depending on your policy and the provider you choose.

How Insurance Coverage Helps

When you're covered by private health insurance, your fund generally pays benefits towards:

Your hospital stay (including accommodation, theatre, and nursing costs)
The prosthetic knee joint, if it’s listed on the government’s approved prostheses list
Medical services provided in hospital, such as the surgeon and anaesthetist (based on the Medicare Benefits Schedule or MBS)

Private health insurance also gives you more control over your care. You’ll likely have:

Shorter wait times compared to the public system
Your choice of surgeon and hospital
Access to private rooms (if available)

Choosing the Right Level of Hospital Cover

Not all hospital cover includes joint replacement surgery. Here’s how the standard tiers break down:

Bronze: Covers joint reconstructions but not replacements
Silver: Covers joint reconstructions but not replacements
Silver Plus: May include joint replacements, depending on the fund and policy.
Gold: Always includes joint replacements, plus all other 38 clinical categories mandated by the government.

If knee replacement surgery is likely in your future, you’ll want a Silver Plus policy that specifically lists joint replacements, or step up to Gold hospital cover for guaranteed inclusion.

Waiting Periods

If you're new to private health or upgrading your cover, most funds apply a 12-month waiting period for pre-existing conditions like osteoarthritis. That means you may need to hold your policy for a year before you can claim for surgery.

Out-of-Pocket Costs

Even with insurance, you may still face out-of-pocket costs if your surgeon or anaesthetist charges above the MBS fee. This is where programs like nib’s Clinical Partners are incredibly valuable – more on that shortly.

nib Clinical Partners Program: Guaranteed NO GAP Knee Replacement

If you’re with nib and looking at knee replacement surgery, there’s a program that could take a lot of the stress out of planning and paying for it. It’s called the nib Clinical Partners Program, and it gives eligible members access to no gap knee and hip replacements with certain surgeons around Australia.

So what does “no gap” actually mean? In this case, it means that nib covers the full cost of your hospital stay, surgery, and prosthetic knee joint, so you don’t get hit with unexpected bills for the treatment itself. All you pay is your usual excess (if your policy has one), and that’s it.

How the Program Works

Some surgeons charge well above what Medicare and your health fund are willing to pay. That gap between what’s billed and what’s covered is often where the out-of-pocket costs start to add up.

The Clinical Partners Program is nib’s way of helping members avoid those costs. Participating orthopaedic surgeons agree to set their fees in line with nib’s arrangements, which means no extra charges for eligible procedures. The program is available in most parts of Australia, and you can find out more by visiting the nib Clinical Partners Program website.

What Else Is Included?

In some cases, if your surgeon thinks it’s appropriate, you may be able to recover at home instead of in a rehab facility, supported by a physio who visits you. This can be more comfortable, more convenient, and often just as effective.

You’ll also get help from a Health Facilitation Specialist, who can guide you through the process, help you prepare for surgery, and check in on you after you’re home.

It won’t be the right fit for everyone, but if you’re with nib and have joint replacement cover, the Clinical Partners Program could be a way to make surgery a bit more manageable both financially and logistically.

Does Medicare Cover Knee Replacement Surgery?

Medicare does cover knee replacement surgery, but only if you're treated as a public patient in a public hospital. In this case, Medicare pays for the procedure, hospital stay, and related medical services under the Medicare Benefits Schedule (MBS). That means there’s usually no charge for the surgery itself, but there’s a catch: you don’t get to choose your surgeon or when the procedure will happen.

Waiting lists for knee replacements in the public system can be long, often stretching 6 to 12 months or more, depending on where you live and how urgent your case is.

If you’re treated in the private system, Medicare still helps by covering 75% of the MBS fee for in-hospital medical services (like your surgeon or anaesthetist), but the rest is up to your private health fund. If your fund doesn’t cover the full gap (or if your doctor charges above the MBS fee) you may still face out-of-pocket costs.

So while Medicare covers the essentials in the public system, it’s private health insurance that gives you faster access, more control, and potentially lower costs

If you're having a knee replacement, Medicare does help with the cost—but how much it covers depends on where you're treated and whether you have private health insurance.

Public Hospital (as a public patient)

If you’re treated in a public hospital as a public patient, Medicare covers the full cost of your surgery. You don’t have to pay for the hospital stay, the surgeon, or the prosthetic knee joint. But you’ll need a referral through the public system, and the waiting times can be long – sometimes over 12 months. You also don’t get to choose your surgeon.

Private Hospital (with Medicare and private insurance)

Here’s what that looked like in 2022–23 for patients with private cover:

Total specialist fees (surgeon, anaesthetist, assistant): Around $4,900
Medicare paid: About $1,900
Private health insurer paid: About $1,800
Out-of-pocket cost for the patient: Around $880

These figures don’t include hospital fees, which are often around $18,000 for a knee replacement. Private health insurance generally covers those, depending on your policy. You may still have to pay an excess or co-payment, depending on your level of cover.

Out-of-Pocket Costs: What You Should Expect

Even with Medicare and private health insurance, there’s a chance you’ll face some out-of-pocket costs when having knee replacement surgery, especially if you’re being treated in the private system. So, what exactly might you need to pay for?

Typical Out-of-Pocket Costs

According to the Medical Costs Finder, patients with private hospital cover who had a knee replacement in 2022–23 typically paid around $880 out of pocket for specialist fees (like your surgeon and anaesthetist). In some cases, this figure was higher, depending on the specialist’s fees and the level of cover.

These costs come from the gap between what Medicare and your health insurer pay, and what your doctors actually charge. Some surgeons charge more than the standard Medicare Benefits Schedule (MBS) fee – and the extra is up to you to cover.

On top of that, you may also need to pay:

Your policy’s excess (usually between $250 and $750, depending on your plan)
Extras like rehab, physio, or follow-up consults if they’re not included in your cover
Scans or pathology tests before or after surgery that aren't billed under your hospital admission

How to Plan Ahead

To avoid surprise costs, here are a few things you can do before booking surgery. You can ask your surgeon for a written cost estimate, including item numbers for the procedure. You can also contact your health fund with those item numbers to check what’s covered. Confirming if your surgeon and anaesthetist participate in a no-gap or known-gap scheme can also help avoid bill surprises, as can checking if your hospital is a recognised provider under your insurance policy.

Choosing the Right Private Health Insurance for Knee Replacement

If you're planning ahead for knee replacement surgery, one of the most important decisions you'll make is choosing the right private health insurance policy. Not all policies cover joint replacements, and even among those that do, the level of cover and out-of-pocket costs can vary a lot. Here’s what to look for when comparing hospital cover for knee surgery.

1. Check That Joint Replacement Surgery Is Included

This might sound obvious, but some lower-tier policies (like Basic or Bronze) don't cover joint replacements at all. Look for policies at the Silver Plus or Gold level, and make sure “joint replacements” is listed as a covered clinical category.

2. Understand the Waiting Period

If you're new to private health or upgrading your cover, you'll likely need to serve a 12-month waiting period for pre-existing conditions like osteoarthritis. This is standard across most funds, and it’s something to factor into your timeline for surgery.

3. Compare Gap Cover Arrangements

Even if your policy covers the surgery itself, you can still end up with out-of-pocket expenses if your specialist charges more than what your fund is willing to pay. Check whether your insurer has no-gap or known-gap arrangements, and whether your surgeon participates in them.

Funds with strong gap cover arrangements can help reduce or eliminate additional charges – especially for specialist fees.

4. Look at Hospital Agreements

Not all private hospitals are recognised by every fund. Before you sign up, check if your local or preferred private hospital is on the insurer’s approved list – this can affect whether your hospital costs are fully covered.

5. Consider Additional Support Programs

Some funds go beyond standard hospital cover. For example, nib’s Clinical Partners Program allows eligible members to access no-gap knee replacement surgery with participating surgeons.

It also includes things like help from a Health Facilitation Specialist, the option to recover at home with support from a physiotherapist (if approved by your surgeon), and pre- and post-surgery support to help you get through the process with more confidence

Programs like these can add a lot of value, not just by reducing costs, but by making the entire experience less overwhelming.

6. Compare Providers

Before committing to a fund, use a comparison tool (like the Health Deal comparison tool) or speak to a health insurance specialist. They can walk you through policy details, explain waiting periods, and help match you with coverage that suits your health needs and budget. Knee replacement surgery is a big step, but having the right insurance in place can make it a

Wrapping Up

Knee replacement surgery can be life-changing, but it’s also a major procedure with equally major costs if you’re not properly covered. Understanding what’s included (and what’s not) under Medicare and private health insurance is essential to avoiding unexpected bills and long waiting times.

Private health insurance plays a big role in helping Australians manage the cost of knee replacement surgery, but not all hospital cover is the same. If joint replacements aren’t listed under your policy – or if your surgeon doesn’t participate in a gap scheme – you could still be out of pocket.

That’s why programs like the nib Clinical Partners Program stand out. For eligible members, it offers no gap knee replacements with participating surgeons, meaning nib covers the full cost of the hospital stay, prosthesis, and surgical fees (aside from your excess). Plus, there’s added support before and after surgery, and in some cases, the option to recover at home with physio support.

Whether you’re weighing up your health fund options or preparing for surgery, it’s worth taking the time to understand your cover, ask the right questions, and plan ahead. The more you know now, the easier it is to focus on your recovery later.

Compare with Confidence with Health Deal

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Disclaimer

This guide is for informational purposes only and should not be taken as medical or financial advice. Health Deal is proud to partner with a range of health insurance providers. While we strive to provide accurate and up-to-date information, health insurance policies and benefits may change. Always check with a financial professional before making any decisions. Health Deal compares selected products from a panel of trusted insurers but does not compare all products in the market. Before signing up for any policy, make sure to read the Product Disclosure Statement (PDS) and check the fund’s official website for the most up-to-date information. For the most current information, please refer to your chosen health fund’s official website or speak with one of our health insurance experts.