What Is the Difference Between Hospital and Extras Cover?

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Is hospital cover different to extras?

What is hospital cover?

What is extras cover?

Do I need hospital cover or just extras?

How do I choose hospital and extras cover?

Where can I find and compare health insurance?

Long story short

Hospital and extras cover are different types of health insurance

Hospital cover is for when you need to go to hospital and want to be a private patient. Extras cover is for services Medicare usually doesn’t cover.

Waiting periods, tax, and other factors work differently for hospital and extras policies

For instance, having hospital insurance can help you avoid additional premium charges or paying more in tax.

Your circumstances affect if you want hospital cover, extras, or both

This includes how old you are and your current health. You’ll likely find your health insurance preferences change over time.

Is hospital cover different to extras?

Hospital cover and extras each handle different aspects of your healthcare journey, like if you need to go to hospital or see an optometrist. But their differences go beyond merely what’s covered.

Treatment costs covered and out-of-pocket costs

Both hospital and extras policies can:

• pay for listed treatments and services
• require you to see a particular provider to have your costs covered
• cover only some of the bill, so you have out-of-pocket costs.

Hospital cover is different to extras cover because:

• Your insurer has an agreement with your doctor and the hospital to cover some, or all, of the costs.
• Your insurer will pay 25% of the Medicare Benefits Schedule (MBS) fee for the procedure.

Extras cover is different to hospital cover because:

• Your insurer may have an agreement with an extras service provider, like no-gap arrangements.
• Your policy will list a percentage or dollar figure you’ll get back.
• You’ll have limits on how much you can claim back; then you’ll need to wait for the limits to reset.

Waiting periods

Both hospital and extras policies have waiting periods.

Hospital waiting periods are different because the Australian Government has rules about how long these can be, like at most 12 months for pre-existing conditions.

Extras waiting periods are different because health insurers can make them as long as they want – although a policy with much longer waiting periods than similar options probably wouldn’t sell well!

Tax

The Australian Government rebate for private health insurance cover means a portion of your premiums for hospital and extras policies can be claimed back at tax time (if you earn below a certain amount).

Having appropriate hospital cover can also make you exempt from the Medicare Levy Surcharge (MLS), even if you earn over the income threshold. Extras cover does not count towards this.

Government incentives for young people

The government has incentives for young people to take out hospital cover, but these do not apply to extras cover.

If you take out hospital cover when you’re young:

• You could get an age-based discount on your premiums for many years to come.
• You can avoid having Lifetime Health Cover (LHC) loading added to your premiums.

What is hospital cover?

Hospital cover is for when you need in-hospital treatment, including day surgery and overnight stays, and want to be a private patient. Hospital health insurance helps cover the costs of your treatment, along with the costs of your private hospital stay and other hospital services. You can also enjoy private patient perks, like the possibility of shorter waiting lists and a private room.

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There are four levels of hospital cover – which are called tiers – and include basic, bronze, silver, and gold. Each successive tier covers more procedures. What a tier needs to cover is regulated, but insurers can opt to include further cover in a ‘plus’ policy. These policies cover more but are likely to be more expensive.

When choosing private hospital insurance, looking at the different tiers and what each offers can help you find the policy that meets your needs. Younger people might prefer a lower tier, like basic or bronze, to avoid the MLS and LHC, get an age-based discount, and have some coverage just in case. Older people or those looking to start a family might want a higher tier, like gold or silver plus, to get certain procedural categories covered as a private patient, like pregnancy and joint replacements.

What is extras cover?

Extras insurance policies typically cover the health services Medicare doesn’t, like general and major dental, orthodontics, physiotherapy, optical, and more.

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Extras insurance policies don’t have as clear tiers as hospital cover. However, extras cover options tend to range from basic policies that cover a few services – like dental and optical – to comprehensive policies that cover lots of services.

The services you’d like on an extras policy depends on your health concerns, including if you want to take preventative steps, like getting regular dental check-ups and cleans, and if you’re managing any conditions, like back problems.

Can you get extras cover without hospital cover?

Yes! If you only want extras services covered (and you aren’t interested in hospital cover’s tax benefits), you can choose to take out an extras only policy.

Keep in mind that if you need to go to hospital and don’t have private hospital cover, you can use Australia’s public hospital. Medicare covers your treatment and hospital accommodation costs. However, you might have a longer wait time in the public system than if you were a private patient.

Helpful tip

Did you know you don’t need to stick to the same insurer for both your hospital and extras cover? While a health fund might offer a discount or perk for bundling your policies (getting both your hospital and extras policies from them), you can also shop around. You just need to remember to pay both insurers!

Andres Gutierrez

General Manager – Health

Do I need hospital cover or just extras?

The cover you need depends on lots of factors, like your age, health needs, and budget.

Hospital cover only

• You don’t have any big health concerns and want the tax benefits.
• You want to make the most of your eligibility for aged-based discounts.
• You’re planning on starting a family soon and want to give birth in a private hospital.
• You know (or suspect) you’ll need a big operation in your future, like a joint replacement or cataract surgery, and would prefer a shorter wait, if possible.

Extras cover only

• You’re generally healthy and want to be proactive about staying that way.
• You have a few health concerns but regular management, like seeing the physio or chiro, is all you need.
• You regularly see a psychologist and use up your 10 Medicare-funded sessions before the end of the calendar year.

If you can see yourself in both these groups, you might want both kinds of health insurance.

How do I choose hospital and extras cover?

We recommend comparing of health insurance using different criteria, like how much it costs and how much you could get back, the level of cover and any limits, and any relevant waiting periods.

It can help to know what you’re looking for in a health insurance policy ahead of time, that way you can quickly discard any policies that don’t suit you.

And don’t worry if you think you might need to change in the future. Needing more or less cover at different stages in your life is normal. What’s important is that you’re getting value from your policy, like only paying for services you actually use.

Where can I find and compare health insurance?

Whether you’re comparing hospital and extras (or both), iSelect is here to make the job easy. We compare a range of health insurance from different providers in a matter of minutes. Simply call one of our health comparison experts on 1800 784 772 or use our online comparison tool to personalise your search.