Study up on how extras work and learn about some practical steps you can take to get the most value out of your policy.
Extras health insurance, also known as general or ancillary cover, allows you to claim benefits for non-hospital related medical services that are not covered by Medicare. If you're unsure about who can benefit from extras cover, the policy types available or how to begin comparing, then this article might be of use to you.
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How do you compare extras only health insurance?
Services everyone can benefit from*
- General dental. Taking full advantage of the free preventative check-ups and benefits for simple procedures can save you from needing major dental treatments that may only be covered by more costly extras policies.
- Major dental. Usually found as a high-level inclusion, this can include root canals, tooth removal, dentures, endodontics and even cosmetic procedures. Its most significant benefit may come from covering orthodontics, especially if you have children.
- Healthy lifestyle. Now a common inclusion in most extras policies offered by funds, this can include a huge range of services like gym memberships, Pilates classes, quit smoking courses and general health checks.
- Travel vaccinations. Planning a trip to the tropics? Extras can pay towards the cost of vaccinations for diseases such as malaria, cholera, hepatitis A and B, meningococcal meningitis, yellow fever and rabies.
- Emergency ambulance transport. Accidents happen, and unless your a QLD or TAS resident, ambulance fees can be costly. This also protects you Australia wide, so it can still be useful even if the state you live in provides free ambulance services.
Services people with certain conditions or health needs may find useful*
- Optical. If you need glasses or contact lenses, then this basic inclusion can be a great help. Keep an eye out for funds that offer no-gap optical as well, since you can get free frames and lenses if you visit an affiliated outlet.
- Physiotherapy. This could be beneficial if you lead an active life, play sports regularly or have certain conditions.
- Chiropractic. Many back conditions and other musculoskeletal disorders can be held at bay or treated with chiropractics.
- Non-PBS medication. If you regularly take prescribed non-PBS medication, you may be able to use this to its full limits.
- Health aids. This can include hearing aids, walkers, prosthetics and many other medical devices.
- Podiatry. This may be essential if you have any conditions affecting the foot or lower limb.
- Audiology. Hearing aids and speech processors aren’t cheap, and the cover available with Medicare may fall short of your needs. If you are hearing impaired, this high-level cover type may be worth including.
- Psychology. This can include group or individual therapies, counselling and more. If you benefit from regular sessions, it can help defray the cost. It can also be worth having to help cover the cost of grief therapy or counselling following a loss.
- Dietetics. This can cover nutrition, diet and weight loss services. If you’re struggling with weight issues, it can be useful to access these services at a lower cost, while people with specific dietary needs might also be referred to dieticians.
*The services listed here are a selection of example to give you an idea of what you can get cover for and is not a complete list. Depending on the fund and the policy you can find many other cover options to match your needs.
The impact unclaimed services and waiting periods can have on value
- Guaranteed value. Think about what services you'll definitely be claiming for and then work out how much money the extras policy will save you in a year. You might think of this as the “guaranteed value”.
- Real cost. If this annual value is lower than the annual premiums, you might think of the difference as “the real cost” of the policy.
In other words, this “real cost” is the amount you’re paying for all the other less certain, but still useful benefits, like emergency ambulance cover, physiotherapy, major dental and anything else that’s included.
Remember to consider the waiting periods as well. To make it easier to calculate the cost, it may help to think of the period where you can't claim and have to pay out of your own pocket as a “one off fee” that you won’t need to pay again afterwards.
As you get older you are more likely to develop health conditions, and it’s good not to have to contend with waiting periods again. This peace of mind is one of the less tangible benefits of health cover, and it can be difficult to put a price on.
Extras benefits claimed for vs the overall policy cost
If you’re breaking even in cost, but are going to the dentist and using more health services than before, you’re coming out ahead in both health and cost. This is because preventative measures, such as dental cleaning, which is included in many extras policies mean you’re less likely to need more expensive treatments later.
General dental cover, in particular, is one of the stars of any extras policy and shouldn’t be underestimated. It’s available with even the most inexpensive and basic plans, and some extras policies even cover 100% of the cost of up to three dental checks per year.
Children who have regular dental check-ups before the age of three tend to be at lower risk of oral disease by age six, and adults can also take advantage of regular checks and professional dental cleaning to help stave off more complex and expensive conditions. Health extras can start delivering benefits almost immediately, but much like other forms of insurance some of the advantages only pay off years later.
Who can't get any value out of extras only health insurance?
There are very few people who are simply unable to get value for money from any extras cover. This is because even the cheapest plans can have outstanding benefits, like covering 100% of all dental cleaning and check-up costs, even if other benefits are only 50% reimbursed.
With extras cover, you may also be more likely to go to the doctor and dentist, preventing much more expensive conditions from developing later. If this sounds like you, “value for money” might be breaking even or spending slightly more on health insurance than you typically do on check-ups.
Families with children can benefit from the “bulk discount” of family health cover. Medicare’s dental benefits are strictly limited and will only cover preventative children’s dentistry for families that are receiving other forms of government financial support.
What levels of cover do extras come in?
- 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.
- 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.
- 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 essential services. While annual benefit limits will be smaller compared to medium or comprehensive extras policies, the cost of premiums for basic extras is also lower.
Set benefits, percentage benefits and benefit limits
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What options do I have for lodging extras claims?
- Combined limits. This is where several different services are included in one shared limit, such as physiotherapy, chiropractic and remedial massage all falling under an overall physical therapy benefit.
- Sub-limits. These apply to specific treatments under a certain service, such as $500 for dentures and $800 for crowns, even though they fall under a major dental benefit.
- Lifetime limits. Fairly rare and generally only applied to orthodontics, this means that your limit does not renew each year, and is carried over even if you switch to a higher level of cover or switch funds.
What waiting periods apply to extras claims?
Just like hospital cover, you'll need to serve a waiting period before you are able to lodge a claim for extras services. While each fund is different, some typical waiting periods include:
- Two months. General dental, physiotherapy and most other extras services.
- Six months. Optical items such as glasses or contact lenses.
- 12 months. Major dental, psychological consultations and orthotic appliances.
- 12, 24 or 36 months. Orthodontics, hearing aids, assisted reproduction drugs.
One important point to keep in mind about extras health insurance is that each 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.
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