The guide · card 1 of 6
Hospital cover and extras cover: what each one is for
Hospital cover helps with the costs of treatment as a private patient in hospital. Extras cover helps with health services outside hospital that Medicare does not cover, such as dental, physiotherapy and glasses.
Hospital cover
- What it is for
- The costs of treatment as a private patient in hospital. You can be a private patient in a public hospital, a private hospital or a day hospital facility.
- What it can pay towards
- Some or all of hospital accommodation (including meals) and theatre costs, and some or all of the in-hospital medical services that Medicare covers, depending on the policy.
- The choice it gives you
- Your own doctor, and whether you are treated in a public or a private hospital that your doctor attends.
- Limits to look for
- Restrictions (services only partly covered) and exclusions (services not covered at all).
- Waiting periods
- Capped by the government at 2 or 12 months, depending on the treatment.
- Tax and loading rules
- Counts for Lifetime Health Cover and for avoiding the Medicare levy surcharge.
Extras cover
- What it is for
- The cost of out-of-hospital health services that Medicare does not cover. Its official name is general treatment cover; it is also called ancillary cover.
- What it can pay towards
- Services such as dental treatment, chiropractic, home nursing, podiatry, physiotherapy, occupational and speech therapy, glasses and contact lenses, and hearing aids.
- The choice it gives you
- Policies offer different levels of extras cover: some cover many services, some only a few.
- Limits to look for
- Limits per service, per year, or for a lifetime, and some services not covered at all.
- Waiting periods
- Set by each insurer, with no government cap.
- Tax and loading rules
- Does not count as hospital cover for Lifetime Health Cover, and extras on its own does not avoid the Medicare levy surcharge.
You can hold either kind on its own, or both. Most insurers offer combined policies, and you can also take out separate hospital and extras policies to mix and match. Ambulance cover is a third kind, available separately or combined with other policies, and in some states and territories it is covered by the government.
Hospital cover, in more detail
When you are admitted to hospital, there are three ways to be treated. As a public patient in a public hospital, you choose neither the hospital nor the doctor. As a private patient in a public hospital, you choose your doctor. As a private patient in a private hospital, you choose both. Being a private patient in a public hospital does not take you off its waiting list: public hospital waiting lists still apply. You can still choose to be a public patient in hospital if you hold private cover.
For the doctors’ part of a hospital stay, the Medicare Benefits Schedule sets a fee for each service. Medicare covers 75% of that fee and private health insurance covers at least 25%. If a doctor charges more than the schedule fee, you may pay the difference yourself. The government’s Medical Costs Finder can help you find out how much you might expect to pay.
Restrictions and exclusions
An exclusion means the insurer pays none of the costs of that service. A restriction means the policy covers it only in part. The Department of Health gives the example of a policy that restricts hip replacement: you are covered as a private patient in a public hospital, but in a private hospital the insurer pays only a small part of the accommodation fees and you pay all the other costs. The Commonwealth Ombudsman publishes guidance on exclusions and restrictions.
Three limits that surprise people
- Long stays. After more than 35 days in a row in hospital, you are treated as a long-stay patient unless your doctor says otherwise, and you pay more for accommodation. Insurers are not allowed to insure that cost.
- Single rooms. Some policies pay the full cost of a shared room but not a single room. If your policy does not fully cover a single room, the hospital should tell you that you will pay the difference.
- Treatment Medicare does not cover. Services not on the Medicare Benefits Schedule, such as elective cosmetic surgery or laser eye surgery, are covered only to a limited extent or not at all, depending on the policy.
Some insurers also cover alternatives to a hospital stay, such as treatment at home or in a community clinic (known as hospital substitute treatment). Insurers do not have to offer it.
Extras cover, in more detail
Nearly everything under extras is covered only in part. The Department of Health describes the two usual shapes: a percentage of each service (its example is 50% of the cost of each dental treatment) or a set amount for the same service each year (its example is up to $500 a year for dental). Those are illustrations of how limits work, not typical figures. A policy’s own limits are on its Private Health Information Statement, a standard summary that exists for every policy on the market.
Waiting periods for extras are set by each insurer. The Ombudsman’s site says they generally run from two to six months for items such as general dental, optical and physiotherapy, and to twelve months or more for major items such as orthodontics or hearing aids.
What neither one pays for
- Specialist consultations in their rooms. By law, private health insurance does not cover out-of-hospital medical services, including specialist consultations in their rooms.
- Scans and tests outside hospital. Out-of-hospital diagnostic imaging and tests fall under the same rule.
- Some natural therapies. Policies cannot cover some natural therapies; your insurer can tell you which.
- Ambulance, unless you arrange it. Medicare does not cover ambulance services. Depending on where you live, you may get a discount or not need cover at all; otherwise cover is available from a health insurer or, in some places, a state or territory ambulance authority.
Questions to ask of any policy
Whichever you are looking at, these questions come straight from the limits above. The insurer, and the policy’s information statement, can answer them.
- Which clinical categories are covered, restricted or excluded, and what tier is it?
- Is there an excess or co-payment, and how much?
- Does it pay for a single room, or only a shared room?
- For extras: what is the limit for each service I use, and is it per year or per lifetime?
- What waiting periods apply to me, given the cover I hold now?
- Is ambulance cover included, and do I need it where I live?
The tiers are explained on the next card, and the waiting periods on the third.