I stopped listening to standard advice the day I saw a client with a perfect credit score get absolutely stitched up by a single specialist gap fee. He had the savings. He had private health cover. Then he had a heart scare. The system does not care about your colour-coded spreadsheet.
You cannot out-save the gaps in the Australian system. You have to outsmart them.
Balancing these bills while trying to build wealth isn’t about skipping flat whites. It is about cash flow management and aggressive negotiation. If you just blindly pay every invoice that lands in your letterbox, you are setting money on fire.
Stop Treating Medical Bills Like Credit Card Debt
This is where people panic. You see a scary number on a letterhead and you drain your offset account to make it go away. Do not do that.
Medical debt is a unique beast. It rarely carries interest immediately. It often takes ages to hit your credit file. And unlike the bank, the specialist’s billing department expects you to haggle.
I once reviewed a bill for a simple private outpatient procedure. There was a miscellaneous “consumables” charge. It was for a box of tissues and some antiseptic. We called the administration. I told them to remove it or I’d take it up with the Ombudsman and their fund. They dropped it. They also shaved $400 off the “booking fee” just because we asked.
Never pay the first number you see. Request an itemized invoice. Look for duplicates. Call them up and offer 60% of the total if you pay in cash right now. You would be shocked how often they say yes. They want the money today, not after chasing you for six months.
The “Hard Asset” Distraction
When people get sick, they usually hoard cash. That is a mistake. Inflation loves a stagnant bank account. It eats away at your purchasing power while you are busy fighting insurance companies.
I knew a bloke who refused to let his savings rot. He kept three months of expenses in cash for the gap fees, but he moved the rest. He drove up north to buy silver on the Gold Coast.
He didn’t trust the digital numbers on a screen to hold their value during a two-year recovery. He was right. While the dollar dipped, his stack sat in a safe, preserving his wealth.
Don’t dump everything into a savings account that pays peanuts. Keep your operating cash liquid, sure. But for the nest egg you are trying to protect? Hard assets are the only things that don’t care about the economy.
Shop Around Before You Go Under
If your medical issue isn’t an emergency, you have zero excuse for not shopping around. We compare electricity providers. We haggle on car insurance. Yet we walk into a dentist’s office and just hand over a blank cheque.
Medicare generally doesn’t touch teeth. That is where the real pain is.
I had a client needing a full mouth reconstruction. The quote he got in Sydney was $45,000. He was ready to raid his Super to pay for it. I told him to pause. We looked at the cost for dental implants in other states and even compared top-tier regional specialists. He ended up getting the work done by a specialist in Adelaide for $28,000.
That is a $17,000 difference. That is $17,000 that stayed in his Super, compounding for the next twenty years. If he had just paid the local guy, he would have lost hundreds of thousands of dollars in future growth.
The Mathematics of the Payment Plan
Here is the only rule that matters: If the provider offers you a 0% interest payment plan, you take it.
Even if you have the cash sitting in the bank.
Let’s say you owe $5,000. You could BPay it today. Or you could pay $200 a month for two years.
Keep your $5,000. Put it in your mortgage offset account or a HISA earning 5%. You make money on the spread. Plus, you keep your liquidity. If you lose your job next month, you still have that pile of cash to draw from. If you paid the bill in full, that money is gone.
Medical practices are not banks. They are usually terrible at collecting debt. They will often agree to absurdly low monthly payments just to keep the account “current.” Use their inefficiency to your advantage.
When to Stop Saving
There is a point where you have to stop funding the future to survive the present. If the medical debt has gone to collections or is on a credit card, stop investing.
The ASX might give you 8% or 10% in a good year. A credit card balance hits you for 20%+ guaranteed. The math doesn’t lie. Pause the voluntary Super contributions. Pause the ETF buys. Kill the high-interest snake in your house before you worry about the garden outside.
But if the debt is low-interest or zero-interest? Pay the minimum. Hoard your cash. Keep investing.
You need to be ruthless. The system is designed to extract maximum value from you at your most vulnerable moment. Don’t let it. Negotiate everything, keep your cash accessible, and never pay full price if you can help it.
Your future self doesn’t need you to be debt-free tomorrow. It needs you to be solvent in twenty years.
