Do I need extras cover?


CHOICE – (June & November 2016) recently looked at extras cover and below is a summary of their findings:

If you’re buying health insurance purely for tax reasons, then no. Penalties of extra tax and higher premiums don’t apply to extras (ancillary) cover.

This type of insurance rarely covers the full cost of your treatment.

On average, health funds pay about:

  • half the cost for the dentist and optometrist,
  • a third for medicines not covered by the Pharmaceutical Benefits Scheme
  • a quarter for hearing aids.

And there are wide variations between funds and policies, too. The most generous health insurance fund for dental, for example, refunded 60% on average in 2011-12, while the most miserly health fund covered just 32%. Only around $370 on average was paid out in extras benefits per person in 2013/14.

CHOICE analysis of top cover health insurance from the two largest health insurance funds, Bupa and Medibank Private, shows that you can save between 30 and 45% of your health insurance premium by dropping extras insurance. For family policies including cover for major dental and orthodontics a saving of approximately $1800 and more for Bupa and Medibank private.

The federal government is also dwindling the 30% Health Insurance Rebate and will drop another percentage point from 27.8% last year to 26.8% this year. So you’ll not only pay more, but also get back less. The Australian Prudential Regulation Authority (APRA) found Bupa recorded a net surplus of $328.7 million compared with Medibank’s $317.7 million for the year to June 2015. Medibank announced a 46 % rise in full year profit to $417.6 million in 2016.

CHOICE (June 2016) reviewed thousands of extras health insurance policies to help you find the best extras cover. CHOICE scored each policy, compared inclusions such as dental, optical, chiropractic, physiotherapy, hearing aids and massage, and more. We will only look at dental in this comparison.

CHOICE selected policies with superior cover and a cheap premium. Premiums shown are for couples and families (singles pay about half). If you can’t find your policy/health fund, it means that none of your health fund’s policies were recommended. Reviewed funds included: Ahm, Australian Unity, Bupa, CUA, GMF, GMHBA, HBF, HCF, HCI, health.com.au, HIF, Peoplecare, Latrobe, Medibank, NIB, Phoenix, QCH, St.Lukes, Health Partners and Westfund.

Comprehensive Extras cover (QLD): Only 2 were chosen by CHOICE as worthy of inclusion from the above list and none of the major health funds were in this list.

Click to read more and view Summary of dental benefits