Orthodontics is a big investment, in both time and money. Health insurance
can help with the costs, but how do you know whether you’re getting a good
deal?
This article is for people who are considering buying extras cover, or
upgrading their existing cover, in order to claim benefits for
orthodontics. It is primarily written for families whose children need
braces, but the advice is just as valid for adults considering
orthodontics.
Not all extras policies are created equal. Some might only cover a couple of hundred dollars worth of orthodontics per year, while a few premium policies will pay out over $2500. If you’re considering using extras to help manage the cost, you have to consider a few things.
It only works if you claim back more than you spend
This is the most important part, and it’s actually not too difficult to calculate whether an extras policy is likely to save you money. If you spend more on premiums than you claim, you’re wasting your money. Good cover for orthodontics comes at a price, so you should be looking at ways to reduce the amount of time you’re paying for a top-shelf policy.
Our research shows that that claiming against only one course of orthodontics won’t be enough to cover the premium over three years.
Extras policies that include cover for orthodontics typically cost around $2100 a year for a family – more if your household income is higher than $202,000, due to the lower government rebate. Over three years you might expect to pay $6300 in premiums. But the average annual limit for claiming on orthodontics is generally around $800–$1000 per year, per person, and there is usually also a lifetime limit of around $2500.
Our research shows that that claiming against only one course of orthodontics won’t be enough to cover the premium over three years
As you can see, you will have paid out more in premiums than what you’ve claimed back if you’re only claiming for one child’s braces (or even possibly two). So to make a policy worthwhile you’ll need to make sure you’re getting extra value through other claims.
Even if you include rebates for twice-yearly dental checkups for two parents and a child, most policies don’t stack up financially.
You’ll also need to claim things like optical and physio
In almost all cases, making sure you also claim on services other than orthodontics is the only way to make your extras policy worthwhile. Claiming on glasses, physio, massages and psychology are all ways to get value from your extras. Will your orthodontic treatment require a tooth extraction? Get it done at your dentist and you may also be able to claim a couple of hundred dollars for this as well (dentistry and orthodontics will have seperate caps).
Plan your year in advance. Know how much you will need to claim to make it
worthwhile. Extras can be a good budgeting tool, but you still need to
write up that budget.
If you just want cover for a child who needs braces, you might be on the lookout for a child-only policy. Unfortunately, only Navy Health and Defence Health offer children-only policies, so unless you qualify to be a member of one of those funds, you’ll likely need to get cover for at least one parent to fund braces for your child.
There’s typically little or no price difference between policies for childless couples and two-parent families. However, if you’re a single parent you’ll pay more to cover your children than you would to cover just yourself. The good news is, adding extra kids doesn’t affect the cost of a policy.
If you’re a two-parent family and your main focus is cover for the kids’ braces, a cheaper policy covering just one parent might be worthwhile. Actual discounts depend on the fund, and not all funds offer discounts for single parents. The downside to this plan is you’ll have one less person on the policy able to make claims for physio and optical, so consider whether this will make it harder to claim back the full premium.
Extras policies typically have a 12-month waiting period for orthodontic cover. Since a typical course of orthodontics lasts between one and two years, you will need cover for two to three years (including the waiting period).
You can’t know ahead of time what your policy will cost in two years, but a
five per cent increase every year on 1 April is a good estimate. If you’re
expecting your income to increase past the
rebate thresholds, your premium will increase even more.
Health funds usually reset their annual limits on 1 January or 1 July. If
you start your course of treatment in the last few months of the year, you
can spread your claims out over three benefit years. Check with your health
fund when their benefits reset.
Starting treatment during the waiting period
What if you can’t wait? Can you still claim against your extras? Funds have
different rules, but will usually still cover you if the treatment is
ongoing after the waiting period ends. The important factor is when you pay
your orthodontist, not when you actually receive the treatment. In this
case, you shouldn’t take the pay-up-front discount, as your health fund
will be unlikely to cover you.
Daniel Graham is a Senior data analyst in the Insurance and utilities team. He maintains the CHOICE database of general insurance products and is the resident expert in insurance pricing. He covers home, car, pet and health insurance.
Previously, Daniel has worked as a finance journalist and data journalist in the investigations team, focusing on insurance stories and comparisons.
Daniel has a Graduate Diploma of Journalism from UTS and a Bachelor of Arts from the University of Sydney. He is RG146 compliance certified to provide general advice in Tier 2 General Insurance and is a member of the Media, Arts and Entertainment Alliance. LinkedIn
Daniel Graham is a Senior data analyst in the Insurance and utilities team. He maintains the CHOICE database of general insurance products and is the resident expert in insurance pricing. He covers home, car, pet and health insurance.
Previously, Daniel has worked as a finance journalist and data journalist in the investigations team, focusing on insurance stories and comparisons.
Daniel has a Graduate Diploma of Journalism from UTS and a Bachelor of Arts from the University of Sydney. He is RG146 compliance certified to provide general advice in Tier 2 General Insurance and is a member of the Media, Arts and Entertainment Alliance. LinkedIn
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