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Should you drop extras health insurance?

Private health insurance is increasingly expensive and your extras health insurance may not give you value for money
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02.Extras health insurance comparison

Note: The table shows the average percentage refunded for the fund, refunds will vary depending on the level of extras cover you have, typically the refund will be higher for top extras cover and lower for budget extras cover. Premiums vary between policies and health funds and have not been taken into account. For a comprehensive analysis see CHOICE Health insurance Best Buys.

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Work it out?

On average around $350 was paid in extras health insurance benefits for each person in the year to September 2013. Premiums for CHOICE health insurance Best Buys in 2013 ranged from $190 for budget policies to $670 for top cover if you receive the full 30% health insurance rebate. In other words, 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

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).

You'll find tips on how to find the best extras health insurance for you here.

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