Worked Examples and Checklists
Is extras cover worth it? A calculation you can do with your own receipts
Test extras cover by comparing the premium after rebate with the benefits you would actually claim, with worked examples for a light user, a regular user and a family.
Extras cover is worth it only if the benefits you will actually claim in a year are more than the premium after rebate, or close enough that you value the predictability. To check, list last year's dental, optical, physio and similar bills, work out what each policy would have paid back using its benefit schedule and annual limits, and compare that total with the premium. Light users usually lose money, regular users of two or three services can come out ahead, and families with children in orthodontics are a separate calculation. Extras do not help with the Medicare Levy Surcharge or the Lifetime Health Cover loading, so this is a pure budgeting decision.
This guide is part of how to compare policies step by step. How benefits and limits work is covered in extras cover explained.
The calculation
Benefits are capped by each service's annual limit and by any combined limit. Use the insurer's benefit for the specific item numbers you use, not a general percentage.
Example 1: light user
Sam, 29, under 65, base tier rebate (24.118%). Last year: one dental check-up and clean ($240), one optometrist visit (Medicare-rebated, no extras claim).
| Policy (illustrative) | Premium | After rebate | Benefits Sam would claim | Net value |
|---|---|---|---|---|
| Basic extras: 60% dental, $300 limit | $420 | $318.70 | 60% × $240 = $144 | −$174.70 |
| Mid extras: 70% dental, $700 limit, $250 optical | $780 | $591.88 | 70% × $240 = $168 | −$423.88 |
Sam is better off paying the dentist directly and putting the premium aside.
Example 2: regular user
Chris, 44, tier 1 rebate (16.079%). Each year: two dental check-ups ($480), one filling ($280), new glasses ($420), ten physio sessions at $95 ($950).
Mid extras policy (illustrative): premium $1,020; dental 60% up to $800; optical $250 limit; physio $50 per visit up to $500.
- Dental: 60% × ($480 + $280) = $456 (within $800)
- Optical: $250 (limit reached)
- Physio: 10 × $50 = $500 (limit reached)
- Total benefits: $1,206
- Premium after rebate: $1,020 × (1 − 0.16079) = $855.99
- Net value: +$350.01
Chris comes out ahead, provided the usage continues. If physio drops to four sessions, benefits fall to $906 and the margin to about $50.
Example 3: family with orthodontics
A family with two children, tier 1 rebate. One child needs braces quoted at $7,500 over two years. Top extras policy (illustrative): premium $2,600 a year; orthodontic lifetime limit $2,000 per person; 12-month waiting period.
- Premium after rebate over the two years of treatment, plus the waiting year: 3 × $2,600 × (1 − 0.16079) = $6,545.84
- Orthodontic benefit: $2,000
- Other claims (check-ups for four people, two pairs of glasses): illustrative $1,400 a year for 3 years = $4,200
- Total benefits: $6,200 against $6,545.84 in premium: about −$346
Orthodontic benefits alone rarely cover the premium of a top-tier policy; the case depends on using the rest of the extras. Ask the orthodontist about payment plans and check the Child Dental Benefits Schedule, which does not cover orthodontics but can help with basic dental care for eligible children.
Questions that change the answer
- Network providers: some insurers pay higher benefits, or no gap for check-ups, at their own or participating providers. If your dentist is not in the network, use the standard benefit.
- Limit timing: if limits reset on 1 January, booking treatment in December and January can use two years' limits. Waiting periods still apply.
- Loyalty increases: some policies raise limits after a few years; do not count them until you get them.
- Separate purchase: extras-only policies from another insurer may suit you better than the extras bundled with your hospital cover.
- Medicare-funded options: a GP chronic condition management plan or mental health treatment plan can give Medicare benefits for some allied health and psychology visits.
A quick decision table
| Your yearly usage | Typical outcome |
|---|---|
| Only a dental check-up | Usually better to self-fund |
| Dental twice a year plus glasses | Often roughly break-even on a basic extras policy |
| Several physio, chiro or psychology visits plus dental and optical | Often worthwhile on a mid policy |
| Planned major dental or orthodontics | Calculate including waiting periods and lifetime limits |
When to talk to a professional
Ask your dentist or allied health provider for a written treatment plan with item numbers and fees, then ask the insurer for the benefit on each item. Health decisions about treatment should be made with your practitioner, not based on what a policy pays.
FAQ
Can I cancel extras and keep hospital cover?
Usually yes, if the insurer sells hospital cover on its own. Your hospital waiting periods and LHC history are unaffected.
Do extras limits reset if I switch insurers?
Benefits you claimed with your old insurer in the current limit period may count towards the new insurer's limits. Ask before switching.
Does the rebate apply to extras?
Yes, at the same percentage as hospital cover. See the rebate calculator.
Is psychology covered by extras?
Some policies include it. If you use a Medicare mental health plan for a session, you cannot also claim that session on extras.
Sources
- PrivateHealth.gov.au — general treatment cover and policy statements
- Services Australia — Medicare and the Child Dental Benefits Schedule
- Moneysmart — budgeting for health costs
