Is Health Insurance Extras Cover worth it: Out of pocket expenses and benefits

Are out of pocket expenses costing Aussies more than their health insurance extras policies are worth? Compare the benefit payouts of different extras claims.

According to the Australian Prudential Regulation Authority’s (APRA) most recent private health insurance statistics, 55.7 percent of the Australian population has a health insurance extras (general treatment) policy. Comparatively, only 47 percent have hospital coverage.

Many Aussies, it seems, place more value in an extras policy over a hospital policy – perhaps relying on the public health system for their hospital needs.

But how much do Aussies actually get back from extras coverage in benefits compared to what they pay in out of pocket medical expenses? We can get an idea of this by looking at APRA’s latest statistics for the June quarter of 2016.

How much do we get back in extras benefits?

In the year to June 2016, the average extras (general treatment) benefits paid out per person was $387. Is this more or less than your extras annual premium? Compare extras only policies. This amount was up on last year’s figure of $376.

By far the largest component of this was dental benefits, which on average paid out $203 per insured over the year.

Which age groups receive the most extras benefits?

Of course, not everyone will get as much from their extras cover as the next person. This widely varies depending on health, age and level of coverage.

With regards to age, the groups with the highest average rebates per person (over $600 in 12 months to June 2016) are:

  1. 65-69 year olds
  2. 60-64 year olds
  3. 70-74 year olds

The age groups with the lowest average rebates per person (under $350 in 12 months to June 2016) are:

  1. 0-4 year olds
  2. 5-9 year olds
  3. 15-19 year olds

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Out of pocket expenses by claim type: How much of the medical fees are covered?

But how much of the fees, on average, do these extras benefit payments cover? The table below gives an indication of the out of pocket expenses for the different extras claims categories over the June 2016 quarter.

As you can see, most of the claims categories have an average rebate of 40-60% of the fees charged for the treatment.

Type of Claim Number of Services Average Benefit per service Average % of fees covered
Dental 10,160,454  $63.06 54%
Physiotherapy 3,057,852  $35.27 50%
Optical 2,696,884  $69.74 59%
Chiropractic 2,525,650  $30.54 52%
Natural Therapies 1,562,623  $30.29 45%
Pharmacy 794,251  $20.30 38%
Podiatry (Chiropody) 644,945  $38.91 50%
Acupuncture / Acupressure 414,749  $26.71 43%
Osteopathic Services 256,889  $33.98 40%
Preventative Health Products/Health Management Program 171,980  $47.28 48%
Other 132,516  $35.80 70%
Speech Therapy 109,197  $44.03 46%
Prostheses, Aids and Appliances 99,881  $146.61 53%
Psych/Group Therapy 86,967  $70.83 42%
Occupational Therapy 79,505  $38.39 42%
Ambulance 46,710  $636.89 100%
Dietetics 46,415  $38.17 44%
Hearing Aids and Audiology 17,592  $572.72 26%
Travel and Accommodation 10,088  $54.30 60%
Ex gratia Payments 3,205  $94.11 61%
Maternity Services 1,655  $59.31 51%
Orthoptics (Eye Therapy) 1,285  $62.24 31%
Community, Home, District Nursing 1,247  $ 46.97 73%
Accidental Death / Funeral Expenses 908  $1,000.71 13%
Hypnotherapy 717  $61.63 38%
Overseas 129  $95.13 59%
Theatre Fees 90  $214.31 34%
School 9  $63.22 98%
Source: APRA Private Health Insurance Quarterly Statistics – June 2016

The most covered types of claims (lowest out of pocket expenses)

The extras claims which pay out the most, in terms of percentage of fees covered by benefits, include ambulance and community nursing claims, according to the APRA statistics. In the June 2016 quarter, around 100 per cent of the ambulance fees were covered by extras benefit payments. On average, benefits covered 73% of community nursing costs. These claims had the lowest out of pocket expenses.

The least covered types of claims (highest out of pocket expenses)

And the least? Well, according to the APRA statistics, that would be accidental death/funeral expenses and hearing aids and audiology claims. On average, benefit payments only covered 13 percent of accidental death/funeral expenses. 26 percent of the costs for hearing aids and audiology were covered by benefits. On that basis we can say that these claims have the highest out of pocket expenses.

Compare for outstanding value cover

Choosing an extras insurance policy is about making sure you have great value cover for the things that you actually need. CANSTAR helps to make that easier for you; you can compare extras health insurance policies using our expert ratings. Find a policy for you by viewing features and inclusions here.

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