Split health cover: what are the pros & cons?

Having private health insurance in Australia can be beneficial as it often helps provide financial cover for many medical procedures which Medicare only provides partial or no reimbursement for. There are, however, hundreds of different policies out there, as well as many different health funds and providers.

Most health insurance providers offer the choice of hospital cover, extras cover or a combined policy of both. Combined hospital and extras cover may be more convenient, as well as cheaper, than taking out separate policies with the same provider. That being said, you may find a hospital cover policy from one provider and an extras policy from another that better suit your needs.

Can you have hospital and extras with different providers?

Yes, you can have hospital cover with one provider and an extras policy with another. This is often referred to as split health cover.

What is split health cover?

As mentioned above, split health cover is when you take out hospital cover with one health insurance provider and extras cover separately through another. There are benefits and drawbacks to splitting your private health insurance in this way.

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What are the benefits of split health cover?

Splitting your health insurance between two providers can sometimes provide better value for premiums and/or coverage compared with taking out a combined hospital and extras policy. You may also be able to get cover for more medical treatments at the same or lower price than if you had a combined policy.

You might choose to split your health cover if you have fairly specific healthcare needs (i.e. your needs for hospital and extras cover differ substantially and are not available in a combined policy). For example, an athlete might choose split cover if they require extensive extras cover for remedial massage and physiotherapy, but only basic hospital cover due to being physically fit with no major health problems.

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

Splitting your private health insurance might save you money, but it’s also a good idea to do your research and compare different health insurance policies to make sure they are offering you value for your money, while providing the cover you need.

What are the disadvantages of split health cover?

The main disadvantage of splitting your health insurance policies is that it requires more work on your part, especially if you want to find a deal that’s right for you. You may have to compare several different policies in order to find the hospital and extras policies that suit your needs. Insurance policies can also 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 which may make them difficult to compare directly.

It’s also typically more convenient to simply take out a combined hospital & extras policy, and insurance providers often encourage you to do so with promotional deals and offers.

If you’re considering changing to split health cover, there are some things to think about before switching health insurance providers:

• The 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 insurance provider could be lost

• The level of cover provided by the new insurance providers

• What the gap payment would be with a different provider

• The cost of premiums

• Your current and future health needs.

Canstar’s private health insurance comparison tables may make the process of comparing policies and providers quicker and easier for you, allowing you to filter for a range of different factors.

Can you have multiple health insurance policies?

You can have multiple health insurance policies, like split health insurance mentioned above. Taking out policies for the same type of cover (e.g. two hospital policies or two extras policies) may not be advisable, as you would be paying twice the premiums for more than likely the same level, and same type, of coverage. There may be cases where having two of the same policies is beneficial, such as having them cover different procedures, but it’s often worth considering whether the extra premiums you are paying are worth it for the extra level of coverage.

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