05.Your guide to extras insurance
Do I need extras insurance?
The number one and most important question you should ask before buying extras insurance, whether it’s as a standalone policy or combined with hospital insurance. If there’s one thing you should take away from reading our health insurance buying guides it’s that a lot of people waste good money on insurance that they don’t use and we don’t want you to be one of those people.
Having said that, this buying guide is for people who have already decided they need extras insurance, so if you’re not sure extras insurance is for you then head over to our health insurance buying guide.
Is my current extras insurance policy right for me?
When it comes to extras insurance, many people are paying more in premiums than they receive in benefits. To work out if your extras health insurance is offering you value for money:
- Request an annual claims statement, which shows the total benefits you received in the last financial year.
- Compare the total benefit with your annual premium.
- If, like many people, you have a combined extras and hospital policy, a bit of maths will come in handy. Select a standalone hospital insurance policy from your fund that’s comparable to the hospital cover in your combined policy (with the same excess and cover level), then deduct its price from the premium you pay. The difference will be the amount you pay for extras health insurance. Compare this premium with your extras benefits. Are you paying more than you’re getting in return?
- The best place to find out about your policies is to check the standard information statement at privatehealth.gov.au
- If you find your premium is substantially higher than the benefits you receive and you don’t anticipate your health needs will change any time soon, consider switching to a less expensive policy or cancelling extras, or ancillary, health insurance altogether. But note you’ll be subjected to waiting periods before you can make a claim if you take up extras again.
Tip: Health insurers often have specials that allow new members to claim straight away for many health services (although usually not the more expensive ones).
What type of extras insurance is right for me?
There are three levels of extras cover:
Budget – suited to healthy singles and couples. These are the least expensive extras policies but bear in mind they policies may exclude a wide range of services.
- Medium – cover for families with young children and middle-aged singles and couples with average health care needs. Medium-level extras policies must cover general dental, major dental and endodontic and at least five other services.
- Comprehensive – designed for families with school-aged children and mature singles and couples with high health care needs. If you’re simply looking for the ultimate in extras policies then look no further. These policies offer the best value for money for general dental, major dental, endodontic, orthodontic, optical, non-PBS pharmaceuticals, physiotherapy, podiatry, and psychology services.
Differences between budget, medium and comprehensive extras health insurance
The biggest difference among insurers is for dental cover – both the range of services and the maximum benefit offered. More than 50% of all benefits paid by extras insurers are for dental treatments.
- If you only go to the dentist for general dental health services, such as check-ups, cleaning or a filling, a basic policy will likely be good value.
- Major dental procedures such as bridges or crowns are normally covered by a medium- or top-cover extras health insurance policy.
- If your children need braces or you or your partner needs a crown, a top-cover policy may suit you best.
Higher limits for glasses and contact lenses
The average optical maximum benefit for the policies we looked at in 2013 was:
- $200 per person for basic and
- $250 for medium and top cover.
Higher combined total limits for all therapies
- The annual limits for therapies such as physiotherapy, chiropractic, massage and natural therapies are often combined with basic policies.
- So, the total amount you can claim is smaller than with medium or top cover policies, which have separate limits.
With the policies we looked at in 2013, the average total maximum benefits for all treatments per person was:
- $1800 for basic
- $4300 for medium
- $7500 for top cover.
More therapies covered
- Basic policies rarely cover you for podiatry or psychological treatment or medical devices such as a glucose monitor.
- While medium policies cover more therapies, annual limits are usually lower than for top cover. For example, the average cover for hearing aids with medium policies is $500, whereas top cover pays $800 on average.
Extras health insurance tips
Look for percentage benefits
Rather than simply paying a fixed amount for a service, such as up to $30 for a physiotherapy session, some policies cover a percentage of your bill, usually from 60% up to 100%. This can be useful if you go to a dentist or other healthcare provider who charges above-average prices. Where these types of benefits apply, it’s worth checking and comparing your annual limits for the particular services with those of other policies.
Look for funds with provider schemes near you
A number of health funds offer provider schemes or even their own optical or dental centres. The fund will have negotiated a price (usually lower than the normal price) with, for example, the dentist or optical store, and will also pay a higher benefit to you. Full cover is sometimes available.
Check for loyalty bonuses
Some health funds pay higher benefits to loyal members. While this is good for you if you’ve been with them for a long time, it can be a disadvantage for new members since your time with another fund is not counted towards these bonuses.
Have you used your lifestyle cover?
Some extras policies offer services such as massage or gym classes and even sunscreen.