Buying Private Hospital Insurance — alone, or do you include Extras cover?

Published January 14th, 2019 by Sandy McLean

Buying Private Hospital Insurance — alone, or do you include Extras cover?

The Australian Government has a policy to encourage lifetime private health cover by financially penalising over 30-year-olds without hospital insurance.

Note that this refers to PRIVATE HOSPITAL INSURANCE. Health funds often tie in EXTRAS cover as a way of commercial value-adding. Extras cover is non-essential cover.

Essentially, all Australian residents already have hospital insurance… it’s called Medicare. However, as someone who has spent a three-week stint in hospital several years ago, I support private health insurance. The ability to obtain a private room, doctors of choice, and all food and board, for the $500 excess is quite worth it, compared to the actual cost. But it is insurance — you have it in the hope you’ll never need it.

Extras cover, as it says, is more of a budgeting tool. It is non-essential. If you don’t use it to full value, then it doesn’t accrue. This is where the funds make a large portion of their profit. But if you do use all the dental, optical, and other therapies often enough, you may get your money back (or more).

There is a growing push to self-insure for these extras — that is, deposit the same amount in the bank each month (that you would spend on the insurance premium) for these purposes. If it’s not used, then it will accrue. Admittedly, this requires a certain financial discipline.

An important point to note is that hospital cover does not have to be taken with the same health fund as extras cover. (Funds won’t necessarily encourage this!)

The two articles below provide deeper analysis:

Keep flossing,


Please note: Dr Sandy McLean’s articles represent personal opinion gleaned from years of working in the medical field as a dentist in private and hospital practice. They are not intended to replace expert financial advice.