Choosing private health insurance in Australia can feel overwhelming, especially when you’re trying to understand the difference between extras cover and hospital-only plans. Many Australians aren’t sure what “extras cover” actually pays for, or how it stacks up against hospital-only cover.
This comprehensive guide explains the key differences between extras cover vs hospital cover Australia, compares inclusions and costs with real Australian examples, and provides a clear decision path to help you choose the right coverage for your needs.
Whether you’re a student on a tight budget, a growing family, or approaching retirement, understanding these two types of cover will help you make an informed choice that protects both your health and your wallet.
Extras cover vs hospital cover in Australia — the short answer
- Extras cover (also called ancillary or general treatment cover) pays for day-to-day health services you receive outside of hospital, such as dental, optical, physiotherapy, and chiropractic care. These are services typically not covered by Medicare, and you claim them as you use them throughout the year.
- Hospital cover (or hospital-only cover) pays for treatment you receive as an inpatient in a private hospital, including surgery, accommodation, theatre fees, and prostheses. It works alongside Medicare to give you choice of doctor, private room options, and shorter waiting times for elective procedures.
The key difference is location and timing: extras cover helps with ongoing health maintenance and prevention, while hospital cover kicks in when you need significant medical treatment requiring overnight stays or day surgery. Most Australians benefit from having both types of cover, but your life stage, health needs, and budget will determine which combination works best for you.
Quick comparison table
| Cover Type | What it covers | Typical claims | Who benefits most |
|---|---|---|---|
| Extras Cover | Dental, optical, physio, chiro, podiatry, psychology, natural therapies | $80 dental clean, $200 glasses, $65 physio session | Everyone needing regular dental/optical care, active people, families |
| Hospital Cover | Private hospital treatment, surgery, prostheses, private rooms | $15,000 knee surgery, $8,000 childbirth, $3,500 appendectomy | People wanting choice/speed for surgery, families planning children, over 30s |
What extras cover usually includes (and what it doesn’t)
Extras cover typically includes a wide range of allied health and ancillary services that Medicare doesn’t fully cover. The most common inclusions are dental care (cleanings, fillings, extractions), optical services (eye tests, glasses, contact lenses), physiotherapy, chiropractic treatment, podiatry, psychology sessions, and remedial massage.
Many policies also cover orthodontics (braces), major dental work (crowns, root canals), dietitian consultations, speech therapy, and some natural therapies like acupuncture or naturopathy. Premium extras policies might include hearing aids, home nursing, and even some alternative therapies.
However, extras cover comes with important exclusions and limitations. Cosmetic procedures, pre-existing conditions (during waiting periods), and experimental treatments are typically excluded. Each service has annual limits – for example, you might get $500 for dental and $300 for optical per year. Sub-limits also apply, such as only two dental cleans covered annually.
Most importantly, extras cover operates on a benefits system, not full reimbursement. If your dentist charges $180 for a filling but your policy only covers $120, you’ll pay the $60 gap out of pocket.
Example claim: dental vs physio
- Sarah’s dental claim: Sarah (28, marketing coordinator) cracked a tooth eating nuts at work. Her extras cover included $600 annual dental benefits.
- Treatment needed: Emergency consultation ($85) + ceramic filling ($280) = $365 total
- Insurance paid: Emergency visit ($65) + filling benefit ($180) = $245
- Sarah’s gap: $120 out of pocket
- Process: Presented membership card at dentist, paid gap on the spot, claim processed instantly through HICAPS
- Physio comparison: If Sarah had ongoing back pain requiring six physiotherapy sessions at $75 each ($450 total), her policy might cover $45 per session (maximum 10 sessions annually), leaving her with $30 gap per visit ($180 total out of pocket).
What hospital (hospital-only) cover pays for
Hospital cover pays for treatment you receive as an admitted patient in a private hospital, whether for planned surgery or emergency care. This includes accommodation costs, theatre fees, medical devices and prostheses, intensive care, and pathology tests conducted during your stay.
One of the biggest advantages is choice of doctor – you can select your preferred surgeon or specialist rather than being assigned whoever is available in the public system. You’ll also typically get a private room, shorter waiting times for elective surgery, and the ability to schedule procedures at your convenience.
Hospital cover works alongside Medicare through a system called “gap cover.” Medicare pays a portion of your doctor’s fees, your insurer pays the rest up to the Medicare Benefits Schedule (MBS) rate, and you may pay a “gap” if your doctor charges above the MBS rate. Many insurers offer “no gap” arrangements with preferred providers.
The level of hospital cover you choose determines which procedures are covered. Basic hospital cover might only include emergency treatment, while comprehensive cover includes everything from heart surgery to joint replacements, pregnancy care, and mental health treatment in private psychiatric facilities.
Private vs public hospital scenarios
Mark’s appendicitis scenario: Mark (45, plumber) needs emergency appendectomy after severe abdominal pain.
Private hospital pathway (with comprehensive hospital cover):
- Arrives at emergency department, treated immediately
- Surgery within 2 hours with specialist surgeon of choice
- Private room for 2-day recovery
- Total medical costs: $8,500 (covered by insurance + Medicare)
- Out-of-pocket: $500 excess + $200 surgeon gap = $700
Public hospital pathway (Medicare only):
- Emergency treatment covered, but may wait for available surgeon
- Shared room with other patients
- Surgery timing depends on urgency and theatre availability
- May wait 4-6 hours for surgery during busy periods
- Total cost: $0, but less choice and potentially longer wait times
Cost comparison & real Australian examples
Understanding the costs of extras cover vs hospital cover Australia helps you budget effectively and choose the right level of protection. Premiums vary significantly based on your age, location, and chosen benefits.
Extras cover typically costs:
- Basic extras (dental, optical): $15-25 per month single, $30-50 family
- Medium extras (adds physio, chiro): $25-40 per month single, $50-80 family
- Top extras (comprehensive): $40-60 per month single, $80-120 family
Hospital-only cover ranges:
- Basic hospital (emergency only): $45-65 per month single, $120-180 family
- Medium hospital (common procedures): $65-90 per month single, $180-250 family
- Top hospital (comprehensive): $90-150 per month single, $250-400 family
| Policy Type | Typical Monthly Premium (indicative) | Typical Annual Out-of-Pocket | Best for |
|---|---|---|---|
| Basic Extras Only | $20 single / $45 family | $800-1,200 | Students, healthy young adults |
| Medium Hospital Only | $75 single / $220 family | $500-1,500 | Single professionals, established couples |
| Combined Medium | $95 single / $280 family | $1,200-2,000 | Most families, regular healthcare users |
| Top Combined | $140 single / $450 family | $1,500-2,500 | High income earners, chronic conditions |
Example profiles:
- Student (22): Emma chooses basic extras ($18/month) for dental cleanings and emergency optical. No hospital cover as she’s healthy and uses bulk-billing GPs. Annual cost: $216 plus gaps.
- Family (35-45): The Johnsons select medium hospital ($240/month) plus medium extras ($70/month) to avoid Medicare Levy Surcharge and cover kids’ dental needs. Annual cost: $3,720 plus gaps.
- Retiree (67): Robert needs comprehensive extras ($55/month) for regular physio and optical, plus top hospital ($130/month) for planned procedures. Annual cost: $2,220 plus gaps.
Remember that Medicare Levy Surcharge adds 1-1.5% to your tax bill if your household income exceeds $90,000 (single) or $180,000 (family) and you don’t have appropriate hospital cover.
Waiting periods, exclusions and gap payments
All private health insurance policies include waiting periods before you can claim benefits. For extras cover, typical waiting periods are two months for general dental and optical services, six months for major dental work, and 12 months for orthodontics.
Hospital cover waiting periods are generally two months for psychiatric services, 12 months for pregnancy-related care, and often longer for pre-existing conditions. Some emergency treatments have no waiting period.
Gap payments occur when your provider charges more than what Medicare and your insurer cover combined. Even with top hospital cover, you might face gaps for surgeon fees, anaesthetist costs, or prostheses not on your insurer’s approved list.
Common exclusions across both types of cover include cosmetic procedures (unless medically necessary), experimental treatments, and services not recognised by Australian health authorities. Always check your Product Disclosure Statement (PDS) for specific exclusions and benefit limits.
Quick checklist to avoid surprises
- Check the PDS thoroughly – understand annual limits, sub-limits, and exclusions before purchasing
- Maintain continuous cover – avoid serving waiting periods again if switching insurers
- Review prostheses lists – ensure your required medical devices are covered at appropriate benefit levels
- Understand excess payments – know when and how much you’ll pay for hospital admissions
- Clarify co-payment requirements – some policies require additional payments for certain services
- Watch for sunset clauses – benefits or discounts that expire after promotional periods
How to choose between extras, hospital-only or combined cover
Your choice between extras cover vs hospital cover Australia depends on your life stage, health needs, and financial situation. Single young adults often prioritise extras cover for dental and optical needs, while families typically need both types to manage children’s healthcare and avoid tax penalties.
Consider your three-step decision process: First, assess your immediate health needs and upcoming procedures. Second, calculate whether Medicare Levy Surcharge makes hospital cover cost-effective for your income level. Third, evaluate your budget for gaps and out-of-pocket expenses beyond premiums.
People with chronic conditions requiring ongoing allied health treatment benefit most from comprehensive extras cover. Those planning surgery, pregnancy, or approaching middle age should prioritise hospital cover. Most Australians over 30 with stable incomes benefit from combined policies that offer both types of protection.
One-line recommendations
- Student (18-25): Basic extras only unless high risk activities or family history suggest hospital cover
- New parents: Hospital cover essential, add targeted extras for children’s dental and optical needs
- Established professionals: Combined medium-level cover balances cost with comprehensive protection
- Retirees: Enhanced extras for ongoing care, plus hospital cover for age-related procedures
Comparing policies and practical tips for switching
When comparing private health insurance policies, focus on annual benefit limits rather than just premium costs. A cheaper policy with low dental limits might cost more overall if you need significant treatment. Check sub-limits carefully – some insurers cap specific services like orthodontics or psychology within broader benefit categories.
Use official comparison tools like privatehealth.gov.au to compare standardised features across insurers. Pay attention to waiting periods, excess amounts, and preferred provider networks that offer reduced gaps. Read recent reviews and complaints data from the Private Health Insurance Ombudsman.
When switching insurers, ensure continuous cover to avoid serving waiting periods again. Most insurers will waive waiting periods if you’re moving from equivalent or higher cover levels. Time your switch carefully around renewal dates to avoid overlap or gaps in coverage.
Key questions to ask insurers
- “What are the annual limits for dental, optical, and physiotherapy services?”
- “Which prostheses and medical devices are covered at 100% benefit?”
- “Do you offer no-gap arrangements with local specialists in my area?”
- “Will waiting periods be waived if I switch from my current comparable cover?”
- “What excess amounts apply to hospital admissions for different treatment types?”
- “Are there any sunset clauses on current promotional rates or benefits?”
FAQs
Is extras cover worth it?
Yes, if you regularly use dental, optical, or allied health services. Most Australians spend $800-1,500 annually on these services, making extras cover cost-effective even after gaps and limits.
Can I have extras without hospital cover?
Absolutely. Many young, healthy Australians choose extras-only policies to maintain dental and optical health while relying on public hospitals for major procedures.
Will extras reduce Medicare costs?
Extras cover services that Medicare doesn’t fully cover, so it reduces your out-of-pocket costs for dental, optical, and allied health rather than duplicating Medicare benefits.
How long are waiting periods for extras?
Generally 2 months for basic dental and optical, 6 months for major dental, and 12 months for orthodontics. Some natural therapies may have shorter periods.
Does hospital cover guarantee private room choice?
Not always. Room type depends on your policy level and hospital availability. Premium policies offer better accommodation options, while basic cover might only provide shared rooms.
What happens to cover if I move states?
Your cover continues Australia-wide, but provider networks and gap arrangements may change. Notify your insurer of address changes to ensure smooth claims processing.
Conclusion
The key difference between extras cover vs hospital cover Australia is simple: extras covers your day-to-day allied health and dental needs, while hospital cover provides protection for inpatient medical treatment and surgery. Most Australians benefit from having both types of coverage, though your specific combination should match your life stage, health needs, and budget.
Before making any decisions, carefully read the Product Disclosure Statement and compare quotes from multiple insurers. Use the decision matrix and cost examples in this guide to determine which level of cover suits your situation best.
Ready to find the right health insurance mix for your needs? Compare at least three quotes today using the official privatehealth.gov.au comparison tool, or explore our linked guides on waiting periods, Medicare Levy Surcharge implications, and age-specific coverage recommendations.
