What Is Extras Cover and How Does It Work?
Healthcare is complex and multi-faceted – and health insurance can be, too. This brief guide to extras cover health insurance is intended to help you gain a clearer understanding of what it is, how it works, why you might want it and how to understand if you’re getting a good value on an extras cover health insurance policy for yourself and / or your family.
Extras Cover vs. Hospital Cover Insurance Policies
A broad variety of healthcare providers take part in the Australian healthcare system:
- Doctors
- Nurses
- Midwives
- Chiropractors
- Dentists
- Osteotherapists
- Physiotherapists
- Acupuncturists
- Massage therapists
- Optometrists
- Ophthalmologists
- Podiatrists
- Dietitians
- Dermatologists
- Speech therapists
- Psychologists
Some of these professionals work in hospitals to provide maternity care or treat illnesses, injuries, diseases and health conditions. Others do not work in hospitals, but rather in private office environments, nursing home facilities or other types of facilities.
Hospital cover insurance policies typically cover you for some or all of the treatments you receive from healthcare professionals in a hospital setting as the result of pregnancy, sickness, injury, disease or chronic health conditions.
Extras cover policies are health insurance policies that cover the types of healthcare services you don’t usually get in a hospital. For example, you wouldn’t go to a hospital for routine teeth cleaning and dental x-rays; you’d go to a dentist’s office. Dentistry, chiropractic therapy, podiatry and physiotherapy are the types of services generally covered by extras cover insurance policies.
If you want extras cover, you’ll typically have the option to enrol in a standalone extras cover plan. Some private health insurers also give you the option to customise plans that include both extras cover and hospital cover.
Is Extras Cover Necessary?
Nobody but you can determine whether extras cover is a necessity. It depends on your physical condition as well as your financial situation.
Some people receive a greater value from their extras cover benefits than they pay out in premiums; so clearly, for these people, extras cover is worthwhile. Others pay for extras cover and rarely claim the benefits.
The Australian Prudential Regulation Authority (APRA) has calculated that, on average, insurers have been paying out about $400 per insured person per year on extras cover policies in the recent past. For Australians over the age of 40, the average amount of claimed benefits climbs higher than $400 per year.
If you’re at least 40 years of age, and you can find extras cover that will meet your needs for about $33 per month, you’d statistically be likely to at least break even on your plan. Of course, you might end up claiming more or less in benefits, depending on your unique situation. If you’re considering a policy that would cost much more than that, consider the details carefully to ensure you wouldn’t be paying for benefits you’d be unlikely to ever use.
If you’re comfortable paying out of pocket for the out-of-hospital healthcare services you use, extras cover may not be a necessity.
One caveat: Be aware that ambulance care is not a free service in Victoria, or in some other Australian states. So you might want to consider taking out an ambulance cover plan, which some insurers offer on a standalone basis and some offer bundled with extras cover.
Here in Victoria, there are new ambulance rates. They aren’t cheap. The typical bill for metropolitan emergency road transportation is $1,234. Emergency rotary transport costs a minimum of $11,005. Some people think it makes sense to take out an ambulance cover policy to ensure they’re covered for this kind of emergency expense.
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