How does private health insurance extras cover work?

Taking out private health insurance extras cover could be your ticket to a world of useful healthcare services. As the name suggests, it goes far beyond the basics, covering services like dental, physiotherapy, optical, acupuncture and more. Without it, you could be left severely out of pocket.

To help you get to grips with the essentials – from what extras really covers to important details like waiting periods and benefit limits – read on so you can start making better-informed decisions about your health and wellbeing and find the best health insurance for you.

Think of extras cover, or extras only, as your backstage pass to a world of healthcare services that fall outside the scope of Medicare and even basic hospital cover. Services like dental, physio and chiropractic care can be essential to your overall wellbeing, and having extras cover means you’ll be financially supported for the cost of using them.

When you purchase extras cover – whether it’s a joint hospital and extras policy or extras only – you’re essentially futureproofing your health. It's like having a wellness savings account, providing you with a safety net when you need it most. While everyone hopes to stay healthy for as long as possible, life has a way of throwing unexpected curveballs, and extras will make sure you’re well-prepared for whatever comes your way.

So, how does it work? It’s pretty straightforward. You pay your health insurance premiums regularly, and in return your provider helps to cover the cost of various healthcare services under the policy. This means when you visit the dentist for a check-up, see a physiotherapist for a sore back or even get prescription glasses, your extras cover will help foot the bill.

Extras cover might sound like the perfect policy to add to your insurance arsenal, but what exactly does it cover? Here’s a glimpse into some of the services commonly covered by private health insurance extras in Australia:

• General dental: Regular dental check-ups, cleanings, fillings and even preventive X-rays fall into this category.
• Major dental: When you need more extensive dental work like crowns, bridgework, dentures or veneers, your extras cover can be a game-changer (because your dental bill could be eye-watering without it!).
• Hearing aids: As we get older, many of us will eventually deal with hearing loss. Extras cover can help with the cost of hearing aids and other devices.
• Optical: Whether it's prescription glasses or contact lenses, extras insurance can help with the cost of having better vision.
• Orthodontics: The road to straight teeth and aligned jaws often includes braces, Invisalign or retainers, all of which could be covered under your extras policy.
• Physiotherapy: From managing joint and muscle pain to fixing up old sports injuries, physio is a staple of most extras policies.
• Podiatry: If you deal with foot pain or get injured, podiatry services can provide much-needed relief.
• Psychology: Your mental health is just as important as your physical health, and your extras policy can assist with diagnosis and treatment for various mental health conditions.
• Remedial massage: Sometimes a good massage can do wonders for your overall wellbeing. Remedial massage can also help with sports injuries and other conditions.
• Speech therapy: For those dealing with speech and language problems, extras insurance can cover the costs of assessment and treatment.
• Dietitian services: Get financial support with extras for services related to diet, nutrition, weight loss and disease management, all guided by a recognised dietitian.
• Health aids and appliances: Essential devices like CPAP machines, blood-pressure monitors, crutches and glucose monitors for diabetes management can all be covered, depending on your chosen policy.
• Acupuncture: This ancient practice involves the use of thin needles to stimulate specific points on your body, with the ultimate aim to alleviate ailments and promote overall wellbeing.
• Chiropractic treatment: If you’re grappling with back pain, neck pain or musculoskeletal issues, chiropractic care might be able to provide relief.
• Ambulance: Depending on where you live in Australia, ambulance cover might be included as part of your extras policy. This coverage is designed to make sure you’re not left footing the bill for emergency transport.

Yes, waiting periods do still apply to extras cover, just like they do for hospital cover. The length of the waiting periods will depend on your private health insurance provider and the specific service you want to make a claim on.

Just like hospital cover, waiting periods for extras must be served before you can start claiming benefits. While they might seem unnecessarily long, they are in place to stop people from signing up for private health insurance solely to claim benefits and then immediately cancel their policy.

Extras benefit limits determine the maximum amount you can claim for a particular service within a defined period. Be aware that these limits can impact your ability to cover the costs of different health-related services.

An ‘annual limit’ is the maximum amount you can claim for a service within a calendar year or financial year, usually resetting on 1 January or 1 July. In most cases, any unclaimed benefits won’t roll over to the next year, so you’ll want to take advantage of your claims within the given timeframe.

‘Sub-limits’, on the other hand, are restrictions on certain services that fall under a broader category limit. For example, you might have an annual limit of $500 for natural therapies, which includes acupuncture, but a sub-limit of $200 for acupuncture specifically. This means you can only claim up to $200 for acupuncture services during the year (and another $300 for other natural therapies).

‘Per-person limits’ apply to each person covered by the policy. These are in place to ensure they don't exceed a certain maximum benefit level annually. ‘Lifetime limits’ are individual limits on expensive services, such as orthodontics or laser eye surgery. These limits don't reset each year and, in most cases, will carry across even if you switch health funds. Be sure to check your PDS and speak to your insurance provider for information about your limits and benefits.

Yes, you might be eligible for the private health insurance rebate even if you have extras only cover. It’s available to anyone who is eligible for Medicare and holds a complying hospital, extras or combined policy, meaning you can save money on the cost of your health insurance.

The exact amount of private health insurance rebate you qualify for is determined by your annual income and age. The rebate can be claimed in two ways: as a reduction to your health insurance premiums, which lowers the amount you pay, or as an offset on your annual tax return.

It’s worth remembering that the rebate’s percentage scales up and down based on your income, and higher-income earners will receive a lower rebate (or none at all). If you have both hospital and extras cover, you can potentially receive the rebate for both components, which will reduce the cost of your overall health insurance. It’s a valuable incentive to encourage Australians to take up private health insurance and relieve some of the pressure on the public health system.

No, having extras cover alone does not exempt you from the Medicare levy surcharge (MLS). The MLS is imposed on high-income earners who don’t hold an eligible hospital insurance policy.

To avoid the MLS, you need to have a complying hospital cover policy, whether as a standalone policy or part of a combined policy that includes both hospital and extras cover. In other words, having extras cover without eligible hospital cover won’t exempt you from the MLS.

Extras cover is a handy safety net for services outside general hospital cover, including things like dental, physio, optical and more. While you’ll still have to serve waiting periods and be mindful of benefit limits, extras cover can help you get the care you need without breaking the bank. And remember, if you're eligible, the government rebate can save you even more money in the long run.

As always, explore your options first, choose the level of extras cover that suits your current lifestyle, and enjoy peace of mind that you are taking control of your health and wellbeing.