Split health cover: what are the pros & cons?

Canstar explains the pros and cons of having split health cover.

It could be handy to have private health insurance in Australia since it can cover many procedures for which Medicare provides partial or no reimbursement. But there are hundreds of policies out there, and knowing which to choose can be difficult.

Most health insurers offer you the choice of hospital cover, extras cover or a combined package of both. Combined hospital and extras cover may be more convenient than taking out both policies separately with the same provider.

But what about split health cover? What are the pros and cons of having hospital cover with one insurer and extras cover with another?

What is split health cover?

Split health cover is where the customer takes out hospital cover with one insurer and extras cover separately through a different insurer. There are benefits and drawbacks to splitting your health cover, which we discuss in detail below.

What split health insurance policies are available?

To help you compare policies, find snapshots below of hospital cover, extras cover and combined hospital & extras cover health insurance products on Canstar’s database.

Hospital cover

The table below features a snapshot of hospital policies on Canstar’s database with links to providers’ websites, sorted by Star Rating (lowest-highest) then by provider name (alphabetically). Please note the results are based on a single male aged under 35 in NSW.

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Extras cover

The table below features a snapshot of extras policies on Canstar’s database with links to providers’ websites, sorted by Star Rating (lowest-highest) then by provider name (alphabetically). Please note the results are based on a single male aged under 35 in NSW.

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Combined hospital & extras cover

The table below features a snapshot of hopsital & extras policies on Canstar’s database with links to providers’ websites, sorted by Star Rating (lowest-highest) then by provider name (alphabetically). Please note the results are based on a single male aged under 35 in NSW.

Compare Health Insurance with Canstar

What are the benefits of split health cover?

Splitting your health insurance between two providers can sometimes provide better value premiums or coverage than taking out combined hospital and extras cover.

With one insurer providing your hospital cover and another providing your extras cover, you might be able to get cover for more medical treatments at the same or a lower price than if you had combined package cover.

A customer might choose split health cover if they had fairly specific healthcare needs, such that their hospital and extras cover needs would differ substantially and not be available in a combined policy. For example, an elite athlete might choose split cover if they required extensive extras cover for remedial massage and physiotherapy, but only basic hospital cover because they were unlikely to become sick or seriously injured.

Keep in mind that some insurers now allow a ‘mix and match’ approach to health insurance – you can get different levels of cover in a combined policy with one insurer (e.g. top level hospital cover and basic level extras cover). So you may not need to split your cover between two separate insurers in order to get this benefit.

If you think splitting your health cover might save you some money each year, you’ll need to do your research to find two separate policies that give you better value cover than a combined one.

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What are the disadvantages of split health cover?

The principal disadvantage of splitting your health insurance policies is obvious – doing so requires more work on your part, especially if you want to find a good deal! You may have to compare more policies in order to find the hospital cover policy and the extras cover policy that suit your situation.

It’s typically more convenient to simply take out a combined hospital & extras policy, and insurance companies often encourage you to do this with promotional discounts or other incentives.

This extra work is compounded by the difficult nature of comparing health insurance policies directly between providers. Insurance policies can include or exclude a whole range of different procedures, offer a different benefit limit or waiting period for the same procedure, and have many other small differences that make them hard to compare directly.

You can use the Canstar website to find out more about health insurance and compare health insurance policies. If you’re keen to explore all your available options to find yourself the best deal, split health cover is one option worth exploring.

If you’re considering switching to split health cover, be aware of the things to check before switching health insurance providers:

  • Possibility of having to re-serve waiting periods
  • Whether Lifetime Health Cover (LHC) loading would apply
  • Loyalty bonuses you may have already accumulated with your current insurer
  • Level of cover provided by the new insurers
  • What the gap payment would be with a different insurer
  • Premium costs
  • Your current and future health needs

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