When the end of the financial year rolls around, many find themselves in the thick of sales, eyeing off those shiny high-res televisions. Or, when the New Year celebrations begin, you might be planning all-new adventures overseas.
But, what about that yearly reset for your extras insurance? You might not have been aware of it until now.
If you’re like 53.5% of the Australian population who have extras insurance,1 you’ll find the amount of money you can claim on treatments like dental, physio and optical are limited each year. Once you hit those limits, you won’t be able to claim until the health fund resets your benefits for services covered by your policy.
For example, if you had an annual limit of $500 for physiotherapy appointments, that’s what you’ll be able to claim back on physio appointments within a 12-month period. Any additional physio sessions afterwards will be paid for entirely out of your own pocket, until your extras limits reset.
Extras health insurance policies will typically reset either on 1 January or 1 July, depending on your health insurer and when you took out your policy. Some health funds reset limits based on when you took out cover, giving you a 12 month time period before your limits will expire.
Extras cover (also known as ancillary or general treatment), allows you to claim on out-of-hospital medical services (subject to you sitting through certain waiting periods), as outlined in your provider’s product brochure. Resetting limits provides more value and encourages customers to renew their policy annually.
Annual claim limits vary depending on your provider and your level of extras cover. You’ll typically find that there is a set amount you can claim each time you receive a treatment listed on your policy, up to an annual limit each year.
The particular amount will differ depending on the treatment and what’s listed in your policy, and will generally be a dollar amount or a percentage of the bill.
All the specific details will be listed in your policy brochure, and it’s critical to give this a read before taking out a policy.
This may sound obvious, but the best way to get value for your money is to claim on the services you use. Visiting the chiropractor isn’t always fun, and neither is the bill. If you’ve been putting off getting treated, however, you’ll at least save yourself some money by ‘taking the plunge’. Carefully check your policy brochure to ensure you haven’t reached your benefit limit.
If your annual premiums are greater than what you tend to claim back on services and treatments – and you don’t expect your health needs will change anytime soon – you might save money by comparing and switching to a different extras policy.
A helpful way to get value from your extras cover is to spread out your claims strategically. For example, you might go to your dentist for a regular check-up. Depending on your policy, you may be able to claim back a certain percentage or dollar amount for a check-up, scale and clean, and fluoride treatment.
For example, one policy may give you 60% back, or another may give you $150. During this appointment, your dentist might schedule you in for fillings. If you’ve already used up your annual limit for general dental, you could hold off on getting your fillings until these benefits reset, thereby reducing your out-of-pocket expenses.
This may seem counterintuitive, as higher levels of extras cover attract higher premiums. However, if you require, for example, regular physiotherapy appointments, you might find yourself reaching the benefit limit early in the year.
A higher level of extras cover can increase your benefit amount or limit, reducing your out of pocket expenses. This might offset the extra amount you’re spending on a higher level of cover.
Some funds offer certain no-gap services; the most common of these is no-gap optical or dental. If you require glasses, for example, and find that your optometrist charges more for your frames or lenses than your benefit limit covers, you will have to pay the outstanding balance – the gap – yourself.
No-gap schemes work so that you don’t have to pay for anything. Ask your insurer or specialist if they have a no-gap agreement.
Beyond the annual yearly limit, you might have some other types of limits on your extras policy, such as:
Note that sometimes multiple limits can apply at once, such as a group limit of $1,000 for a number of medical treatments, but a $500 limit per person. These limits will vary between insurers, so it can help to compare different policies for a better understanding of what each one covers.
No, any unused limits won’t carry over if you haven’t used them by the annual reset date. During the COVID-19 pandemic several health insurers did allow unused limits to carry over, but that was due to exceptional circumstances.
When switching health insurance, it’s vital to have a new policy lined up when you cancel your existing one, as you won’t be able to make any claims during that time and, depending on your personal circumstances, the level of cover you are switching to or your new health insurer, you might need to undergo waiting periods again.
Extras cover offers affordable access to services that aren’t covered by Medicare. For that reason, it can be important cover for many Aussies.
To ensure you get value for money from an extras policy, our experts put themselves in your shoes to understand your needs, lifestyle, and budget. This means we’ll help you in your efforts to ensure you won’t be spending money on any unnecessary services, plus we’ll help you consider options to reduce any out-of-pocket expenses throughout the year.
If you’re thinking of taking out extras cover, or a combined health insurance policy with extras cover for a range of treatments, look at the annual limits through our free health insurance comparison service, or call our experts directly.
