Save on health insurance by ditching unnecessary extras

EXTRAS cover was costing Anthony Keane and family a packet every year, so he took action and saved a bundle.

YOU’D think that with a family of four and a daughter about to have more than $10,000 of expensive dental work, having private health extras cover would be a no-brainer.

However, when I crunched the numbers with my health insurer, it was clear that quitting extras would save more money.

That’s because my policy — like many extras policies — had a lifetime limit of $2000 per person for orthodontics, and we were already halfway to the limit even before the fresh $10,000 kicked in.

Extras was costing my family almost $1500 a year, and spending that just to get back $1000 from the insurer made little financial sense, so we ditched it.

Of course, extras insurance pays out for much more than orthodontics. Dental, optical and physiotherapy are key payment areas and each comes with annual limits. You either use it or lose it.

After we chose to cancel, Murphy’s Law popped up with some treatments for physio, massage, dental and podiatry, but I still think we’re breaking even.

Many Australians mistakenly think that they need to have extras cover to avoid the hefty government tax penalties for higher income earners, or the lifetime health cover loading of up to 70 per cent that hits people over age 30 who failed to take out hospital cover earlier.

However, extras insurance has nothing to do with this government carrot-and-stick approach — with a big emphasis on the stick — and you only need private hospital cover to avoid penalties.

Gap payments are another potential frustration. You might only get 60 per cent of your expense back — often less — when claiming on extras.

Statistics show that more people have extras cover than hospital cover, so we clearly have an attachment to it.

And for many people who regularly visit medical providers, it may be worth it.

However, don’t blindly stick with a policy you’ve had for years without checking that you are getting value for money.

If not, find another extras provider that suits your situation, or ditch the expense altogether.

Originally published as Save on health insurance by ditching unnecessary extras