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How Does Extras Cover Health Insurance Work & How to Claim

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Anneke Van Aswegen Updated: 25 May 2020
Types of Health Insurance

Whether you’re considering buying Extras cover for the first time or recently experienced a significant life change, for example becoming a parent, you’re probably wondering whether extras insurance is worth the money, which plan to choose and how to claim.

The key to making an informed decision about an Extras health insurance plan is to examine what different health funds have to offer, how much it costs, what their waiting periods are, and what’s not covered.

This article endeavours to clarify Extras private health insurance and the process of claiming.

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What is Extras cover?

Extras cover, also known as ancillary cover or general treatment services, provides a benefit toward the cost of out-of-hospital treatments that are intended to manage or prevent a disease, injury or condition, for example, optical and dental. Ancillary cover generally help reduce your out-of-pocket expenses. Private health insurers in Australia typically offer these policies as a standalone plan or in combination with Hospital cover.

Health insurance extras only

Private health insurance policies only providing Extras cover without Hospital insurance. Note; Extras only cover does not help you avoid the Medicare Levy Surcharge, you need to purchase an appropriate level of Hospital insurance for that.

Extra and hospital cover combined

Private health insurance policies only providing Extras cover without Hospital insurance. Note; Extras only cover does not help you avoid the Medicare Levy Surcharge, you need to purchase an appropriate level of Hospital insurance for that.

Extras only health cover options

Depending on your health insurance provider, there are usually 3 categories of extras only policies to choose from:

Basic extras

Generally, the cheapest option, offering a limited number of extras. Typically, includes general dental, chiropractic, physiotherapy, and optical cover, with a set annual limit usually lower than the Medium extras insurance packages.

Mid/Medium

A more expensive, but generally still affordable option providing increased limits for a broader range of services, like some major dental, podiatry, and occupational therapy – in addition to what the basic plan covers.

Top/Comprehensive

The most expensive plan, covering a comprehensive range of services. Generally including everything offered in the basic and mid options, including orthodontics, hearing aids, psychology and blood glucose monitors at a higher annual limit.

Always read your health insurance extras only Standard Information Statement (SIS) which provides you with a detailed summary of the general treatments included in your policy. This statement can be found on the PrivateHealth.gov.au website.

Do I need extras cover?

Whether you need extras only health insurance or should combine it with your hospital policy should generally depend on your unique circumstances, including your past and current health, your age, family responsibility and what you can afford.

According to the most recent APRA Private Health Insurance statistics, at 30 June 2018, over 13 million people in Australia, about 54.3% of the population, have some form of ancillary cover. Benefits receiving the highest amount of payouts include:

A general list of treatments found in an extras health insurance policy

The above list serves merely as a guide of the popular choices that might be included in a general treatment health cover policy.

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Should I get extras cover?

Ancillary cover should be considered if you’re going to make the most of the services available. An extras health insurance plan will help you pay the costs associated with treatments not covered by Medicare, like physiotherapy and dental. However, every person’s circumstances are different. Whether health insurance extras will be of value to you, depends on your health needs, stage of life an what you can afford.

7 Considerations to help you decide if you need extras cover

  1. Your age
    For example, a young and healthy Australian with good vision and excellent teeth might rarely require general treatment services, whereas a person over the age of 65 might be thinking of the expenses associated with things like hearing aids, hip and joint replacements and major dental procedures.
  2. Your health
    Deciding if you need extras insurance depends on your health care requirements. The needs of a growing family will be vastly different from that of a single person. Also, your past and current health and your family’s medical background should be taken into account; if you have a history of mental or physical ailments, you might need financial support to cover the costs of future treatments and services.
  3. Your budget
    The cost of extras health insurance should be considered before purchasing a policy. Consider how much you’ll need to claim back on the services you’ll most use and whether the premium you’ll pay justifies the return. If you’re on a tight budget and don’t have a family and are still young and healthy, it likely won’t make financial sense to purchase a comprehensive policy when a basic one will do.
  4. Out-of-pocket expenses
    When reviewing extras insurance options, be sure to consider the gap payment required, i.e. the amount of money you’ll have to pay after the private health insurance and Medicare benefits are paid. This is called your out-of-pocket costs and usually includes medical gap, excess or co-payments for ancillary services
  5. Waiting periods
    Health funds may have different waiting periods – the amount of time you’ll have to wait before you can start claiming benefits. For example, the general waiting period for pre-existing conditions is 12 months. So, if you need immediate treatment for something and don’t have extras health insurance, purchasing it now might be a waste of money if you can’t wait for the predetermined period to pass before needing the benefit.

    You might also want to check the waiting list for elective surgeries before you purchase a health insurance policy.
  6. Your limits

    Annual limits refer to the amount you can claim on benefits each year, meaning the amount you can get back is capped.

    Lifetime limit is the maximum benefit paid to an individual for specific services, for example, orthodontics.

    Sub-limits are usually applied to particular benefits within a larger limit, per person, per year. For example, you might have a $300 combined limit for physiotherapy and chiropractic, with a sub-limit of $200, meaning the most you can claim yearly for one of the services is $200, with the remaining $100 to be spent on the other service you’ve not yet claimed.

    Your limit is dependent on the level of cover you choose; basic, medium or comprehensive.However, rather than paying a fixed amount (e.g. $190), you might gain more value from a policy offering to pay out a percentage of your bill for each treatment, usually from 60% up to 100%.
  7. List of recognised providers
    Many private health insurers have a network of health providers with whom they’ve negotiated deals for their members. For example, a set percentage return or discount for a specific service, which will help lower your overall out-of-pock costs. Check which providers are listed under the extras health funds you’re considering.

Is getting health insurance extras worth it?

If the premium you pay annually will be higher than the benefits you’ll receive, and you do not anticipate your health needs changing anytime soon, then general treatment cover might not be worth it for you. However, if you’re starting or growing your family or nearing retirement age, investing in a quality general treatment policy might save you lots of money.

How to claim health insurance extras

Before you go for treatment, check with your health fund to see if they have a preferred provider which may give you a discount or a higher percentage back.

What is HICAPS?

HICAPS stand for Health Industry Claims and Payment Service. You just swipe your card at the designated terminal, wait for your benefit to go through, and pay the difference if there is any. Most places accept HICAPS, but if they don’t have such a system, you can always pay in full and submit your claim via the insurer’s online portal.

When would my insurer not pay out for an extras claim?

Private health funds will usually not pay an extra claim if:

When does private health insurance reset?

After your annual limit of extras cover is reached, you must pay the associated health care costs until your general treatment services are reset. Depending on the health fund you’ve chosen extras limits generally reset on the 1st of January or at the start of the financial year (1 July). Checking with your private health insurer is essential.

Before deciding whether you should buy extras insurance, shop around and compare what different health funds have to offer.

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  • Reduce out-of-pocket expenses
  • Keep you family healthy
  • Easy and convenient
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