Everything you need to know to find extras-only health insurance

If you need new glasses each year or see a physio or chiro regularly, then extras cover has the potential to save you money.

Kylie Matthews

4 min read

February 4, 2021 - 4:34PM

It’s important to do your sums to work out if extras cover is right for you. Picture: iStock.

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Do you feel as though you’re constantly forking out big bucks for health-related costs?

Need a new pair of specs annually or regular adjustments at the physio? Does the thought of a family visit to the dentist for regular check-ups give you a pain in the wallet?

If you answer yes to any of the above, opting for ‘extras’ cover (or general or ancillary cover as it is sometimes called) on your health insurance policy has the potential to save you some money.

If you answered no, extras cover may not be right for you.

Here is what you need to know about extras cover and how to choose the right option for you.

WHAT ARE HEALTH INSURANCE EXTRAS?

Extras can cover a wide range of out-of-hospital healthcare services and products that don’t come under Medicare. These can vary dramatically but some common extras may include clinical therapies such as:

There are also a handful of natural therapies that some extras policies may offer including:

Acupuncture

Chinese medicine

Remedial massage

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WHO IS EXTRAS COVER BEST FOR?

According to the Australian Prudential Regulation Authority (APRA), in June 2020, 52.9 per cent of Australians had some form of “general” treatment cover. Whether you’re already one of those Australians or considering joining their ranks will depend entirely on your personal circumstances.

If you’re seeking out health insurance for a family who require clinical therapy, dentistry and optometry services regularly, or if you’re an individual or couple who will use these services regularly, opting for extras cover may offer some savings.

On the other hand, if you rarely visit a clinical therapist, don’t wear glasses and only visit the dentist once a year for a check-up, extras cover may prove to be more expensive than paying these costs yourself.

To ensure value for money, you don’t want to pay more in extras cover than you’ll receive in benefits from your health fund. To determine whether you will save money with extras cover, compare the total annual cost of the service or therapy – and the percentage you will save using your extras cover – with the annual cost of your extras cover.

It’s important to also note that extras often come with “annual limits” on how much you can claim and also “waiting periods”, which is the amount of time you must wait on signing up for a policy before you can make a claim. These vary depending on policy and insurance fund so always do your homework.

Check if you can find cheaper extras cover

You will need to do your sums to work out if the cost of extras is more than you are paying out in health services. Picture: iStock

HOW MUCH IS EXTRAS HEALTH INSURANCE?

The cost of extras varies significantly depending on the policy, fund, level of cover, type of insurance – individual, couple, family, services covered, which state you live in and the level of cover you choose – basic, medium or comprehensive.

You can use insurance comparison websites to compare relevant policies and how much they cost while also comparing their annual limits, wait times and inclusions and exclusions of each.

HOW DOES IT WORK?

Extras cover provides you with a ‘percentage benefit’ on the total cost of a specified health-related services and/or products. The remaining amount, which is not covered by Medicare or your health fund, is called a ‘gap fee’ or an out-of-pocket expense that you must pay.

Your percentage benefit depends entirely on your extras policy. There are different levels of extras cover available – basic cover will have more limits and fewer services while comprehensive policies may cover a wider variety of services and procedures.

CAN YOU JUST GET AN EXTRAS HEALTH COVER POLICY AND NOT HOSPITAL COVER?

Yes, you can purchase an extras-only health insurance policy, however, you will have to pay the Medicare Levy Surcharge, which is levied on Australian taxpayers who earn above a certain income and do not have hospital cover.

Depending on your circumstances, this will mean any savings you make throughout the year using your extras-only insurance policy could be cancelled out by the Medicare Levey Surcharge, so be sure to get some professional tax advice and do the sums before signing up to an extras-only policy.

CAN YOU HAVE HOSPITAL AND EXTRAS COVER WITH DIFFERENT PROVIDERS?

Yes, you can split your hospital and extras cover between two different health funds – you may choose to do this if your health insurer can’t offer you a combined hospital and extras policy that meets your particular needs.

Some insurers offer a more flexible approach to combined hospital and extras policies by allowing customers different levels of cover making the splitting of policies unnecessary.

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QUESTIONS TO ASK YOUR HEALTH INSURER TO GET THE BEST EXTRAS COVER

What does this extras policy cover?

Are there any wait times on this policy and if so, what are they?

What are the limits of cover on this policy on all extras?

How much does this policy cost per annum? Is there a discount for full upfront annual payment? Can I pay in monthly instalments?

Is there a discount for getting combined extras and hospital cover?