Your Guide to Extras Cover in Australia
Extras cover, which is also known as general or ancillary cover, provides cover for the routine treatments that Aussies tend to use regularly. It is important to consider whether purchasing extras cover makes sense for you and/or your family, or whether you would prefer to pay out of pocket for routine treatments. This guide outlines what services are covered under extras, what the benefits and limitations are, the types of cover available in Australia and more.
- Extras cover is also known as general or ancillary cover. It covers routine out-of-hospital health care services like dental, optical, and chiropractic treatment.
- Most health funds offer three levels of extras services: basic, mid-level, and top.
- Be aware of any benefit limits or waiting periods that may apply to your policy as this can affect your claims.
- 1 What is Extras Cover?
- 2 What Services are Covered by an Extras Policy?
- 3 Why Do People Buy Extras Cover?
- 4 Levels of Extras Cover
- 5 Can I Get a Government Rebate for an Extras Policy?
- 6 Are There Waiting Periods For Extras Cover?
- 7 Be Aware of Benefit Limits
- 8 Will Extras Cover Reduce My Out-of-Pocket Expenses?
What is Extras Cover?
Extras cover is sometimes called general or ancillary cover, and its purpose is to provide cover for the routine healthcare costs that happen out of hospital. Extras cover can be purchased as a standalone policy or to complement a hospital policy, and it’s available in different coverage levels. APRA reported that as of 31 March 2018, 54.6% of the population had extras cover.
What Services are Covered by an Extras Policy?
The exact services covered by an extras policy vary between insurers and depend on what level of coverage you opt for. Read the policy details carefully before making a decision to check that you’re covered for the services you use most often.
Common extras include the following:
- Acupuncture: Needle treatment for overall health
- Chiropractic: Back pain, neck pain, and other musculoskeletal conditions
- General Dental: Check-ups, cleaning, fillings, and preventative x-rays
- Major Dental: Crowns, bridgework, dentures, and veneers
- Hearing Aids: Assistive devices for hearing loss
- Naturopathy: Non-invasive services including nutrition, herbal medicine, or massage
- Optical: Glasses or contact lenses
- Orthodontics: Braces and retainers to straighten teeth or realign jaw
- Physiotherapy: Joint and muscle pain, sports injuries
- Podiatry: Foot pain or injury
- Psychology: Diagnosis and treatment for conditions affecting the mind
- Speech Therapy: Speech and language problems
Why Do People Buy Extras Cover?
People often think of hospital cover as the insurance they hope they won’t need, while extras cover is in place to subsidise the services they know they’re going to use. For many Australians, most of their regular healthcare spending doesn’t happen in a hospital; it happens at the dentist, the optometrist, the chiropractor, or the naturopath—services that can be covered by extras insurance.
With extras insurance, Aussies can get benefits back on healthcare services they use throughout the year.
Levels of Extras Cover
Generally speaking, most health funds offer three levels of extras cover. Inclusions, exclusions, and benefit levels will differ between funds, so it’s worth comparing policies from different funds to find one that suits you.
Best for: singles and couples, young and healthy
Basic cover is the lowest level of cover and tends to be the most inexpensive. It may include general dental and optical with a small selection of other extras. Benefit levels are lowest in the basic plans, which means you can claim back a limited amount throughout the year.
You may also find that benefit limits are combined across treatments. This means that you have one benefit amount and it can be reached through any treatments you claim throughout the year.
Best for: Families with young children and middle-aged people
Mid-level extras cover is more comprehensive than basic, including a wider range of services and treatments. Benefit levels are usually higher, and there may be separate limits for different treatments. This gives you a higher level of overall cover.
Best for: Seniors, families with adolescent children, people who use health services frequently
The top level of extras cover is the most expensive, but it offers the most cover. More expensive treatments such as orthodontics or laser eye surgery may be included. Benefit limits are also the most generous, so you can claim back more during the year.
Can I Get a Government Rebate for an Extras Policy?
Yes. The Private Health Insurance Rebate is available to people who hold an eligible hospital, extras, or combined policy. The rebate amount you qualify for depends on your income. The rebate can be claimed as a reduction to your health insurance premium or as a tax offset on your tax return.
|Singles||< $90,000||$90,001 - 105,000||$105,001 - 140,000||> $140,001|
|Families||< $180,000||$180,001 - 210,000||$210,001 - 280,000||> $280,001|
|Base Tier||Tier 1||Tier 2||Tier 3|
|Age < 65||25.059%||16.706%||8.352%||0%|
Are There Waiting Periods For Extras Cover?
Yes, there are usually waiting periods associated with extras cover. These are set by the fund and there may be different waiting periods depending on the benefits.
Unlike with hospital cover, there are no portability laws in place to prevent you from re-serving waiting periods on an extras policy with the same level of cover. If you switch to a new fund, you may be required to serve a waiting period that you already served with your previous fund. However, the good news is that most funds will let you off the hook and waive the waiting period.
Be Aware of Benefit Limits
Extras claims may be subject to various limits. Again, this will vary by fund. If you’re unsure of your limit or how much you have used, it is often easy to check through your online account or your fund’s app, if they have one. Otherwise, you can contact your fund.
Here are some common limits applied to extras benefits:
Yearly limit: The maximum amount you can claim for a service during the year. Unclaimed benefits do not rollover, but reset at the start of your fund’s year. This is usually 1 January or 1 July but varies by fund.
Sub limit: This is a limit on a service that falls under your yearly limit, and is usually per person. For example, you may be limited to $200 of acupuncture services under a larger umbrella limit of $500 total for natural therapies.
Per-Person limit: Each person covered by the policy may be limited to a maximum benefit level each year.
Overall limit: There may be an overall membership limit that governs the per-person limits on your policy. It is not necessarily the sum of each individual limit, so check with the fund for details.
Lifetime limit: Funds often impose individual lifetime limits on certain expensive services, such as orthodontics or laser eye surgery. These limits carry across all funds and don’t disappear even if you switch funds.
Will Extras Cover Reduce My Out-of-Pocket Expenses?
Extras cover is designed to reduce out-of-pocket expenses for regular health-related services and treatments. What you’ll pay depends on three main factors:
What your provider charges for the service you received.
Whether or not your provider has an agreement with your fund.
Your level of cover.
Your extras cover may offer a fixed dollar amount back on services, or you may receive a certain percentage of the fee back. Compare policies to find a structure and premium price that meets your needs.
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
- Remedial massage
- 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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