Avoid costly bills for common treatments and items such as dentistry and glasses with extras health insurance.
Extras cover (or just extras) is a form of private health insurance that allows you to claim benefits for non-hospital related medical services that are not covered by Medicare.
This article aims to give you a detailed breakdown of the different tiers of policy available, the services which are typically covered and other useful information so that you are able to compare this type of health insurance with confidence and make the best extras cover decision for you.
Although the names of each tier of extras health insurance will vary between providers, they will typically offer benefits for a comprehensive, medium or basic range of treatments and services.
- Comprehensive extras. The highest level policy available and also the most expensive, it is designed to suit the needs of mature singles, couples, families and others with extensive health care needs. It covers the broadest range of non-hospital treatments and pays the highest benefits on claims. Common services covered include major dental, orthodontics, endodontics, home nursing, alternative therapies, remedial massage, weight loss programs and more.
- Medium extras. If you are middle-aged or have a growing family, this intermediate policy can be a good choice for balancing affordability and cover. It pays benefits for a broad range of services, has reasonable premiums and is typically suited to those with an average need for health care services. Services that you can expect to be covered for include major dental, optical, physiotherapy, occupational therapy and more.
- Basic extras. Designed for those who are young, fit and healthy and not in need of a high level of cover, this policy will pay benefits for a limited selection of vital treatments such as general dental, optical and physiotherapy. While annual benefit limits will be smaller compared to medium or comprehensive extras policies, the cost of premiums for basic extras is also much lower.
Below you can find examples of commonly claimed for medical services that comprehensive, mid and basic extras will pay benefits for. This is by no means an exhaustive list, and you will find most extras will include a wide range of services.
The Australian Government has introduced three incentives and penalties to encourage people to take out private health insurance. These are the private health insurance rebate, the Medicare Levy Surcharge (MLS) and the Lifetime Health Cover loading (LHC). So does holding an extras policy without hospital cover allow you to take advantage of, or avoid these schemes?
- Private health insurance rebate. Extras only policyholders are eligible.
- Medicare Levy Surcharge. Requires hospital cover to be exempt.
- Lifetime Health Cover loading. Requires hospital cover to be exempt.
So in order to avoid the MLS and the LHC you will need to take out a combined hospital and extras policy, but holding extras only still allows you to take advantage of the private health insurance rebate, which can be paid either as a premium reduction or as a tax deduction. The exact rebate you will be eligible for is affected by your income level and your level of cover.
Like hospital cover, waiting periods for benefits apply to extras too. As a general rule you will need to serve a two month waiting period for your claim to be paid on treatments such as general dental, optical, physiotherapy and natural therapies. However, longer waiting periods may apply to more specialised services, some examples of which can be found below.
- Major dental. Expect to serve a 12 month waiting period.
- Hearing aids. The waiting period for hearing aids can range from 12 to 36 months.
- Health management programs. A six month waiting period commonly applies.
One important point to keep in mind about extras health insurance is that, unlike with hospital cover, each health fund is free to set waiting periods of its choice. Therefore, keep an eye out for promotions which may waive waiting periods to attract new members, but also be more vigilant about checking the fine print before purchasing an extras policy.
Unless you are treated by a doctor that bulk bills, you may still have to pay out-of-pocket expenses for extras services if the medical practitioner charges above the Medicare Benefits Schedule (MBS) fee. Luckily, several policy and health fund features exist that can help prevent unpleasant surprises when the bill arrives.
- Full gap cover. If you are willing to spend more on your extras policy opt for one that offers full gap cover. This will negate 100% of any additional costs you may incur.
- Known gap cover. If cost is a concern, find an extras policy that includes known gap cover. While out-of-pocket expenses will not be completely negated you will know what the amount will be before being treated and can budget accordingly.
- Preferred providers. Many health funds have a network of affiliated health care providers. Getting treatment or purchasing items such as glasses frames from these providers can further help to reduce your out-of-pocket expenses.
Why are waiting periods applied to extras?
What are annual benefit limits?
What is the difference between set and percentage benefits?
How do I lodge extras claims?