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Last Updated on 25 June 2018

Health Insurance Extras Cover

In Australia, most people are required to purchase Hospital cover or will be subject to a Medicare Levy Surcharge. Many people also get a rebate to help pay premiums. The purpose of Hospital cover is to pay for emergency treatments or treatments for serious medical conditions that require admission to a public or private hospital. The Hospital cover you purchase does not provide for day-to-day routine care that may be necessary to achieve optimum health.

Extras cover, or general cover, provides is for the routine treatments that virtually everyone requires.  It is important to consider whether purchasing Extras cover makes sense for you or your family, or whether you would prefer to pay out of pocket for all routine treatments.

Why Do You Need Extras Cover?

For most people, the bulk of healthcare spending over the course of the year doesn’t come from a visit to a hospital. Instead, you pay for routine therapies.  Extras cover means that some or all of the costs of this routine care is paid for by your health fund.  Extras policies may have substantial differences in the specific types of care that you can receive as part of the policy.  If you require a certain kind of care, you should be sure to ask the health fund about whether policy you are looking at will provide that cover.

What Types of Medical Care Do Extras Policies Cover?

Some of the typical types of care that may be covered by Extras cover include:

  • Chiropractic care – For back and neck pain and other musculoskeletal conditions
  • General Dental care – Regular check-ups, cleaning, fillings, preventative x-rays
  • Major Dental care – Restorations, crowns, bridgework, dentures
  • Orthodontics – Braces, retainers, straightening of teeth, jaw and bite alignments
  • In-home nursing care
  • Occupational therapy
  • Physiotherapy – Treatment of joint and muscle pain, sports injuries. Can also include pre- and post-natal care
  • Optical care – Glasses, contact lenses and repair under some policies
  • Osteopathy
  • Speech therapy
  • Podiatry – Treats sore, injured or diseased feet and ankles
  • Hearing aids – Help for those experiencing hearing loss
  • Orthotics
  • Acupuncture – Consultation and treatment with a recognised acupuncturist. Involves the therapist inserting fine needles into certain pressure points in the body to restore health and well-being
  • Naturopathy – Non-invasive treatments such as nutrition, herbal medicine and massage to help your body heal itself
  • Dietetics
  • Psychological care – Diagnosis, treatment and prevention of conditions affecting the human mind and behaviour

Not every policy offers the same types of cover. A health fund must provide a written statement of the types of Extras cover that is included in your policy so you are prepared for what to expect.

What Types of Extras Cover Are There?

Extras cover can be broadly grouped into three different levels:

  • Basic is the best choice for singles and couples who are relatively young and healthy and who do not use a lot of services. For example, a basic policy may cover general dental services like a cleaning or filling a cavity but won’t cover braces, bridges, crowns or other more complex dental procedures. Benefits limits are lower for basic extra cover than for other policy types. For example, the average optical benefit may be set at $200 per person for basic cover, but $250 per person for medium or top cover.
  • Medium is typically the best choice for middle age people, as well as for families with young kids who have an average need for services. Medium cover is more comprehensive in terms of both types of cover and benefits limits compared with basic cover, but will not cover expensive procedures that top cover offers such as braces for kids.  While basics policies may have combined limits for therapies, both top and medium cover typically have separate limits so the total amount of covered care is greater.
  • Top is often the right option for older people, families with children in school, and others with higher levels of health care consumption. Top cover provides the broadest types of benefits. While premiums are more expensive, you can also expect higher annual limits on coverage. For example, a medium policy provides $500 on average for hearing aids while a top cover policy provides an average of $800 for hearing aids.

In addition to choosing coverage levels, you can buy different types of extras cover depending upon your family situation. For example, you can purchase singles policies, couples policies, or family policies. Those in de facto relationships are eligible to purchase couples or family policies, as are people who are married.

What Are the Waiting Periods for Extras Cover?

Waiting periods are set by law for hospital cover; however, this is not the case for Extras cover. Extras policies may have different waiting periods for various type of benefits.

When switching from one Hospital policy to another, portability rules also forbid health funds from making you re-serve waiting periods. Again, these consumer protection laws do not apply to Extras policies. However, the vast majority of health funds will not make you re-serve a waiting period if you switch to a new Extras policy with the same level of cover as your old fund. If your new fund has more comprehensive cover, you may have to serve a waiting period before getting the broader benefits.

Because waiting periods are not standardized by law when you purchase Extras cover, you need to shop around among policies to try to minimize the time you must wait before necessary treatments are covered.

How Does Extras Cover Affect Your Out-of-Pocket Expenses?

There is a rebate for the purchase of an Extras cover policy as there is to help with premiums for Hospital cover. These policies are usually relatively affordable and purchasing an Extras policy can significantly lower the total amount you spend on health care. You pay premiums for the policy but less out-of-pocket when you visit a provider, giving you more control over your costs.

Extras cover may provide a fixed amount for services, or may cover a percentage of the bill such as 70 percent of the costs of treatment.  Many health funds have a network of providers that help to keep costs lower. Providers who participate with the health fund may agree to charge a lower price for treatments.

Should You Buy a Combined Hospital and Extras Policy, Or a Combined Policy?

There are separate Extras policies that can be purchased independently or you can purchase a combined policy that has both Hospital and Extras cover.  You should compare the costs and the coverage of each different kind of policy to decide which is right for you.

Frequently Asked Questions About Health Insurance

There are three types of health insurance in Australia. They are:

  • Hospital Cover
  • Extras Cover (also known as general or ancillary cover)
  • Ambulance Cover

Hospital cover can ensure any unexpected surgeries, treatments or hospital stays you may require will be covered. With appropriate cover you will have the flexibility to choose your own doctor and the option of receiving treatment in a private hospital.  Most hospital covers allow you to stay in a private room. One other perk is skipping the public hospital systems’ waiting list, which can be lengthy for non emergency treatment.

Extras cover pays benefits for a a range of services, often including treatments and procedures related to the fullowing:

  • Dental/oral health
  • Glasses and contact lenses
  • Podiatry
  • Physiotherapy
  • Psychulogy
  • Acupuncture
  • Remedial massage
  • Chiropractic
  • Hearing aids
  • Travel vaccinations

Ambulance cover, as the name suggests, will cover you should you require emergency ambulance transport. In an emergency, there is enough to worry about. Having the expenses covered for provides security and peace of mind. Many hospital covers include emergency ambulance transport If yours doesn’t, you will need to shop for this separately.

Life is unpredictable. You never know when you might need cover. No matter what life stage you’re in, there’s a policy out there for everyone. You can select as much or as little cover as you want, depending on your health needs and requirements. It’s a small price to pay for the peace of mind health cover provides.

There is no one answer here. Costs vary across providers and policy types. Just because a policy is cheap, that does not mean it is ‘value for money’ and vise versa. Make sure you check what’s included and excluded in a policy before signing up, as you want to purchase a policy that best fits your specific needs.

Premium: A premium is the price you pay for your insurance policy (it may be paid annually or on an ongoing basis).

Policy: An insurance plan. In other words, it is the type of insurance you choose to select.

Policy Holder: The owner, or ‘holder’ of a policy.

Claim: In the event that you require treatment for a service covered by your policy, you can lodge a claim for reimbursement of all or part of the cost of that treatment.. These days, most claims are submitted electronically by the health care provider (dentist, physio etc)

Lifetime Health Cover: Lifetime Health Cover was put in place to encourage young Australians to seek out and maintain ownership of private health insurance early in their lives. If you do not take out a policy before you turn 31, extra charges will be applied should you take out a policy at a later time.

This means you will pay a 2% loading on top of your premium for every year that passes after you turn 30. For example, if you take out a policy for the first time at age 32, you will be charged 4% of your premium as an extra, then at age 40, 20% and so on, up to a maximum loading of 70%.

The loading is payable for 10 consecutive years of cover - after which it is removed and you premiums will be reduced.

Pharmaceutical Benefits Scheme (PBS): Medicare offers assistance for Australians with many of their their prescribed medication costs through the PBS. This assistance is in the form of subsidies towards the cost of many medications. You can check if your prescribed medication is on the list of subsidised items here.

Medicare Levy Surcharge: The Medicare Levy Surcharge is an additional charge (tax) applied to single Australian taxpayers who earn over the income threshold of $90,000 per year, or families/couples who earn over $180,000 per year. This surcharge is only applied to those who choose not to have a private health insurance policy.

The surcharge is designed to reduce pressure on the public health system by encouraging those with higher incomes to invest in private health cover.

Private Health Insurance Rebate: The government’s Private Health Insurance rebate lowers premiums for most Australians with private health insurance Older Australians may enjoy an even higher rebate. Our calculator can help you estimate the Government health insurance rebate you may receive.

Disclaimer: The above information is correct and current at the time of publication

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