This article will cover the following topics:
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?
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.
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 health.com.au policies.
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
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.
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.
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?
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.
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.
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.
Join our calls for health insurance to be examined