Should you get health insurance for braces?

Is getting extras cover for orthodontics really worth it? And if it is, how do you find the best insurance for braces?

Orthodontic cover in extras

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 purchasing 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.

This article will cover the following topics:

Read our orthodontics buying guide if you want more information on treatment options.

Is it worth getting extras for orthodontics?

Not all extras policies are created equal. Some might only cover a couple of hundred dollars worth of orthodontics, while a few premium policies will pay 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. 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.

Extras policies that include cover for orthodontics typically cost around $1600 a year for a family extras policy – more if your household income is higher than $180,000, due to the lower government rebate. Over three years you might expect to pay $5000 in premiums.

Our research found that claiming against only one course of orthodontics won't be enough to cover the premium over three years. 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 this is the only way to make your extras worthwhile. Claiming on glasses, physio, massages and psychology are all ways 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.

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.

What to do if more than one child needs braces

Is it medically and financially reasonable for everyone to get braces at the same time? This is one way to reduce the time you spend paying for a top level policy. However, watch out for annual "policy limits" that cap how much you can claim for everyone on the policy in a year.

If you can't do it all at once, you need to plan ahead. Consider whether it's worth continuing to pay for cover in the "off years", or dropping it and serving the waiting period again later on.

If you stagger treatments one after the other it means you will spend more years paying ever-increasing premiums in order to make claims. Unless you're getting value out of other features like physio and optical benefits, you might struggle to find value over the long term.

Reconsider your policy after the first year of treatment

At this point you've been paying your premium for two years, and you've probably got another six to twelve months of treatment left to go. When you get your premium increase notice in March you'll know how much you can claim back from the fund. It might be a couple of thousand dollars, or it might be just a few hundred. Is it still worth the premium? Or is it time to drop extras and just pay for the orthodontist out of your own pocket?

How does orthodontic cover work?

Orthodontics are covered under the extras, or ancillary, cover in your health insurance. You don't need to have hospital cover for orthodontics, unless your treatment requires dental surgery in a private hospital.

How much you can claim is determined by a policy's percentage benefit, annual limit and lifetime limit. Not every policy has all three, but most will have a combination of at least two, which restricts how much you can claim. Every fund has its own rules, but the basics are the same wherever you go. For help on choosing extras cover, check our buying guide for more information. 

Lifetime limit

This is the total amount you can ever claim for one person. You'll almost certainly claim this much for top and bottom braces, so watch out for policies that have an attractive lifetime limit but low annual limits. Lifetime limits often take into account how much you've claimed from other funds, so don't think you can max out your limit with one policy and then switch to another.

Most funds have lifetime limits, with the exceptions being HBF, Latrobe Health, Navy Health, Defence Health and most policies.

Annual limit

This is the amount you can claim for each person every year. All funds use these, with the exception of a couple of policies from CBHS and Health Partners.

Orthodontic cover usually has its own annual limit. Some policies combine it with other services like major dental and endodontics. In this case there will probably be a second orthodontic sublimit.

Percentage benefit

This is how much of an individual claim the fund will pay if you haven't hit your annual or lifetime limits yet. If, for example, your policy has an 80% benefit, and you make regular payments of $200 to the orthodontist, then you will be able to claim $160 back from your fund. If your orthodontist has HICAPS they can bill the fund directly. Not every policy has this feature, and the fact that you'll be out of pocket on all your payments won't prevent you from claiming your full annual limit.

Loyalty benefits

Many funds increase lifetime or annual limits after you have been a member for several years. If a policy like this suits you because of its benefits in other areas (like optical and physio) then by all means consider it. However, we think you shouldn't have to lock yourself into a policy for five years just to claim the maximum amount. Who knows how much the premium will go up in that time?

Paying the orthodontist

Orthodontists know their services are expensive. An 18-month course of metal braces can cost from $5000 to $9000. Look for an orthodontist that offers an interest-free payment plan, with the bulk of the cost paid in monthly installments during the course of treatment.

Your orthodontist should provide information about costs, payment plans and a description of the treatment in a written treatment plan – your health fund will want a copy of this.

You can expect to be billed for an initial consult where you'll get a treatment plan. The bill for the treatment itself might be split between an upfront fee, and the rest in monthly installments. Because of the upfront fee, you're likely to be more out-of-pocket in the first year.

Ask your fund when your claims will be paid. There might be a rebate every payment you make, or it might be in one payment at the start of the treatment. If you're offered a discount for paying the whole bill upfront, check if this affects how much you can claim back.

When you should take out cover

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.

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.

Who should get cover?

Only Navy Health and Defence Health offer children-only policies, so you'll likely need to get cover for at least one parent. There's typically 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.

Want to find out if you can save on health insurance? Take our Do I need health insurance quiz.

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