Medicare Rebates for Psychology: How They Work, and Why There's Usually a Gap

If you've been told you can claim some of the cost of seeing a psychologist back through Medicare, you may also have noticed that it doesn't cover the whole fee. That difference — often called the "gap" — surprises a lot of people, and it's rarely explained well. Here's a plain-language guide to how the rebates work, why a gap usually exists, and what your options are.

What a Medicare Rebate Actually Is

A rebate is a partial refund from Medicare. You pay the psychologist's fee, and Medicare pays a set amount back to you. It is not a discount the psychologist applies, and it is not the same as bulk billing (more on that below). The rebate amount is set by the government, not by your psychologist.

To access rebates for psychology, you generally need a Mental Health Care Plan from your GP. You may also hear this called a Mental Health Treatment Plan (MHTP) — the name was officially updated some years ago, but both terms are still used interchangeably by GPs, psychologists, and Medicare. If your GP refers to either one, they're talking about the same document and the same pathway to rebates.

How to Get a Mental Health Care Plan

• Make a longer appointment with your GP: let the receptionist know it's to discuss your mental health, so enough time can be set aside.
• Your GP will assess how you're going: if a plan is appropriate, they'll prepare one with you and write a referral to a psychologist.
• Book in with your psychologist: bring the plan and referral along with you (your GP's clinic will often send these across for you).

Under the Better Access initiative, a Mental Health Care Plan gives you access to a set number of individual sessions per calendar year. Typically your GP will refer you for an initial number of sessions and review how things are going before referring you for the remainder.

Why There's Almost Always a Gap

The Medicare rebate is a fixed dollar amount, while psychologists set their own fees based on the actual cost of providing care — clinical time, session preparation, professional registration, insurance, ongoing training, and running a practice. The rebate was never designed to cover the full cost of a session, so the difference between the fee and the rebate is the gap, sometimes called the "out-of-pocket" cost.

The rebate amount also depends on a psychologist's registration and area of practice endorsement — for example, clinical psychologists attract a different rebate to psychologists with general registration. Rebate amounts are reviewed and indexed by the government each year. Our Fees & Rebates page lists the current rebate and gap that apply to sessions at Insight Works.

What About Bulk Billing?

When a psychologist bulk bills, they accept the Medicare rebate as full payment, so there's no gap for you. Because the rebate often doesn't cover the cost of providing care, fewer psychologists are able to bulk bill, and those who do often reserve it for people in particular financial circumstances. It's always worth asking but it isn't something you should assume will be available.

Other Ways to Manage the Cost

• Private health insurance — if you have "extras" cover that includes psychology, you may be able to claim there instead of Medicare (you can't claim both for the same session). Whether Medicare or your fund gives you the better return depends on your policy.
• Privately funded sessions — if you don't have a referral, or you've used your rebated sessions for the year, you can still see a psychologist privately. This also means there's no limit on the number of sessions.
• Workplace support (EAP) — some employers offer a number of free, confidential counselling sessions through an Employee Assistance Program.

The Short Version

A Mental Health Care Plan from your GP unlocks a number of rebated sessions each year. The rebate covers part of the fee, not all of it, and the leftover gap exists because the government-set rebate sits below the real cost of quality psychological care. If cost is a worry, the most useful thing you can do is ask the practice directly — at Insight Works we're always happy to talk through our fees, what you'd be likely to get back, and the options that fit your situation, before you commit to anything.

Note: This article is general information, not financial or medical advice. Medicare rebate amounts and rules can change over time — please check our Fees & Rebates page for current figures, or confirm with your GP, psychologist, or Services Australia.