GUIDES & RESOURCES

Hospital and Extras Cover

The first step to finding a private health insurance policy which meets your needs, is understanding the system and your choices. In Australia, private health insurance is made up of two kinds of coverage: hospital cover, and extras cover.
Hospital and extras cover Australia

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What is hospital cover?

Hospital health insurance policies cover you if you go to hospital for treatment. Hospital cover policies differ between providers.

For example, different health funds will have different inclusions, exclusions, excess (what you pay if you need to be admitted to hospital), and out of pocket expenses (the gap between what your health fund pays, and what you’re expected to contribute)1.

As of April 1 2019, the Australian government’s new classifications for private hospital products will come into effect. The four hospital cover product tiers will be as below:

  • Basic
  • Bronze
  • Silver
  • Gold

What is covered by the four categories of hospital policies?

Here’s a brief explanation of what’s covered in each of the four private hospital products. For more information, please view our article which breaks each tier down into more details, click here to read it.

Basic Cover:

Basic hospital covers you only as a private patient in a public hospital for rehabilitation, hospital psychiatric services, and palliative care.

Bronze Cover:

Bronze hospital covers you for all of Basic, as well as a range of other treatments including: brain and nervous system, eye (not cataracts), ear, nose, and throat, tonsils adenoids, and grommets, bone, joint and muscle, joint reconstructions, kidney and bladder, digestive system, hernia and appendix, breast surgery, and diabetes management (not including insulin pumps).

Silver:

Silver cover provides cover for all treatments covered in Basic and Bronze, as well as additional cover for hospital treatment relating to: the heart and vascular system, lung and chest, blood, back, neck, and spine, dental surgery, podiatric surgery (provided by a registered podiatric surgeon), hearing device implantation, and more.

Gold:

Gold Cover provides cover for all treatments covered in Basic, Bronze, and Silver, as well as cover for additional treatments relating to: cataracts, joint replacements, dialysis for chronic kidney failure, pregnancy and birth, assisted reproductive services (such as IVF), weight loss surgery, insulin pumps, pain management with device, and sleep studies.

What is extras cover?

Extras cover (also known as general or ancillary cover), provides benefits for services not generally covered by Medicare. Some common services covered under extras policies include physiotherapy, dental, and optometry1.

Government rules classify extras policies under three categories, which helps to compare policies based on what they do and don’t include. The three extras categories are:

  • Comprehensive
  • Medium
  • Basic

What is covered by the three categories of extras policies?

Comprehensive Cover:

Comprehensive policies must include general and major dental (classification of minor or major dental depends on individual funds); endodontic (dental surgery); orthodontic (usually involves braces or other dental appliances); optical (lenses and frames); non-PBS pharmaceuticals (medications not listed under the Pharmaceutical Benefits Scheme); physiotherapy (manual therapies and exercise programs); podiatry (foot and ankle conditions); and psychology (treating and preventing mental health issues).

Medium Cover:

Medium cover must include most general and major dental; endodontic; and any five of the following services: orthodontic, optical, non-PBS pharmaceuticals, physiotherapy, podiatry, psychology, and chiropractic (spinal adjustments).

Basic Cover:

Covers all other policies that don’t meet comprehensive or medium coverage requirements.

It’s important to remember that while a policy may include coverage for a certain treatment or service, there may be specific exclusions and rebate limits that apply. When you compare your cover options, check for any exclusions on services that are important to you or your family.

What is a Standard Information Statement?

All health funds are required to provide Standard Information Statements (SISs) for their hospital, extras and combined policies2.

The SIS must provide an outline of the key policy features – and classify the policy type using the categories outlined above. This can make it easier for you to compare similar policies, and make the decision on what suits your circumstances.

Do I have to have my hospital and extras policies with the same health fund?

No. You can choose hospital and extras policies from different providers, although most health funds will offer a combined package.

Do waiting periods apply before I can claim against my hospital or extras coverage?

Yes. If you’re getting private health insurance for the first time, are upgrading your plan, or haven’t served the waiting periods with the fund you’re transferring from, it’s likely you’ll have waiting periods for the additional benefits.

There are maximum waiting periods that apply for hospital extras cover:

  • Twelve months for pre-existing conditions, obstetrics (pregnancy) and weight loss procedures
  • Two months for psychiatric care, rehabilitation or palliative care (even if the treatment is for a pre-existing condition)
  • Two months for all other situations. Most health funds won’t apply a hospital treatment waiting period if you have an accident after you join the fund and need hospital treatment

Waiting periods for extras cover are set by the health funds, so it’s a good idea to compare policies from different funds, and select the one which meets your needs.

Does hospital cover include ambulance cover?

Medicare doesn’t cover emergency ambulance cover3. But depending on where you live, it may be covered by your State or Territory government. If not, check if you can include it as part of your hospital cover.

Do I have to have hospital and extras cover to avoid the Lifetime Healthcare Loading?

If Australians don’t take out private health insurance before July 1st following their 31st birthday they pay a 2% loading on their premium for every year they don’t hold insurance (capped at 70%). This is known as the Lifetime Healthcare Loading (LHC)4.

You need to have basic hospital cover to avoid the LHC – however, extras cover is optional and doesn’t affect the loading.

Is there a “best” hospital and extras policy?

Finding a hospital and extras cover that suits yours and your family’s needs depends on your individual needs, circumstances, budget, and your life stage.

Compare your hospital and extras cover with iSelect

With iSelect you can compare hospital and extras policies and packages to find one which meets your needs. Compare benefits and prices side by side, and find a combined package or mix and match providers to get exactly what you’re looking for.

Compare health policies online, or call us on 13 19 20 to speak with one of our health insurance expert advisors.

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Sources:
1. https://www.privatehealth.gov.au/ health_insurance/what_is_covered/privatehealth.htm
2. http://www.health.gov.au/internet/ main/publishing.nsf/Content/private-health-insurance-reforms-fact-sheet-information-provision
3. https://www.privatehealth.gov.au/ health_insurance/what_is_covered/ambulance.htm
4. https://www.moneysmart.gov.au/ insurance/health-insurance

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