Explore Health Insurance

Joshua MalinWritten by Joshua Malin
Reviewed by Lana Hambilton
Last updated 20/11/2023

Key takeaways

For those who want the best of both worlds, you have the option of combining hospital and extras cover together under a combined health insurance policy. Here are a few key things to know about combined cover:

  • Hospital and extras cover are both designed to contribute towards the cost of a different range of medical expenses, so they operate in very different ways. You’ll want to understand the differences between hospital and extras before taking out cover.
  • The Basic, Bronze, Silver and Gold tiers only apply to hospital insurance. While there are different levels of extras cover, these levels are defined by each individual health fund.
  • If you’re over the age of 30 and taking out cover for the first time, it’s likely that you’ll need to pay the Lifetime Health Cover loading. Luckily, on a combined cover policy, this loading only applies to the hospital cover portion of your policy premium.

Why take out combined cover?

Combining hospital insurance with extras cover is one way to get more value from your health insurance policy. You’ll get to enjoy a broader range of inclusions and have the flexibility to combine different levels of cover for hospital and extras (e.g. Gold hospital combined with lower-level extras). This type of cover also allows you to:

  • Find a policy that meets your health needs both in and out of hospital.
  • Claim on out-of-hospital services you’ll actually use (e.g. physio, remedial massage, dental).
  • Enjoy the convenience of only paying a single premium and having one contact point for all your health insurance needs.
  • The hospital insurance component of your cover can help you avoid paying the Medicare Levy Surcharge (MLS) if you’re a higher-income earner and maintain an active policy throughout the entire financial year.


Choosing a combined cover policy

If you think a combined cover policy is the right choice for you, the next step is to compare policies to find one that meets both your extras and hospital insurance needs. Here are a few things to keep in mind while you compare:

  • Level of cover. When it comes to taking out a combined cover policy, the levels of cover available to you will depend on your health fund. Some funds will let you mix and match levels of hospital and extras cover, while others will have a few fixed options.
  • Excess. As with standard hospital cover, you’ll likely need to choose an excess amount when taking out a policy. The excess is an out-of-pocket cost you pay on admission to hospital. A higher excess will usually come with a lower premium and vice versa.
  • Co-payment. Like an excess, a co-payment is paid by the patient as a contribution towards the cost of their hospital admission. This is a fixed daily payment for each day spent in hospital and is usually capped at a maximum amount per admission.
  • Life stage. As you age, your healthcare needs will change. Keep this in mind while you look for a policy. You should also consider factors like your family medical history and any pre-existing conditions.

Lana Hambilton, Head of Health Insurance

Expert tips on choosing the right combined cover policy for you

Our health insurance expert, Lana Hambilton, has some tips on how to find a combined cover policy that meets your needs without breaking the bank.

Consider all taxes and loadings that may apply

When deciding whether to take out combined cover, it’s important to consider any additional taxes and loadings that may apply to you if you delay taking out eligible hospital coverage. This might be the case if you’re a high-income earner or over the age of 30.

Standalone cover may suit you better

If you want both hospital and extras cover, you’re not limited to a combined cover policy. You can also take out hospital and extras separately, either from the same health fund or two separate funds.

Get the right level of cover for you

Combined cover is an excellent way to save money on any healthcare expenses you may incur. With so many different options and combinations available, it’s essential that you take the time to ensure you select a suitable level of cover that meets your needs.

How does combined hospital and extras cover work?

With combined hospital and extras cover, you can benefit from both types of insurance under one policy and have peace of mind, knowing your policy includes a range of medical treatments both in and out of hospital (up to your policy limits). These policies are typically pre-packaged by health funds to suit different lifestyles and budgets.

If a health fund doesn’t offer a combined package to meet your needs, you can choose separate standalone hospital cover and extras cover and combine them yourself to create something that suits you better.


Hospital and extras cover

Patient with combined cover in private hospital

What’s the difference between hospital and extras cover?

To get the best combined insurance policy for your needs, you’ll first want to understand what the two types of health insurance offer and the differences between them. We’ve outlined some of the key differences between these types of cover below.

Hospital cover

Hospital cover pays towards medical conditions that require inpatient hospital treatment. This can include joint reconstructions, cataracts surgery and pregnancy and birth-related services depending on the level of cover you choose. To claim a benefit from your health fund, the treatment must be medically necessary, listed on the Medicare Benefits Schedule (MBS), included on your policy and all relevant waiting periods completed.

Hospital insurance will pay a benefit towards your treatment as a private inpatient in a private or public hospital. If you’re treated in a private hospital, you’ll be able to avoid public waiting lists, choose your available doctor and have a private room (depending on availability).

Hospital cover is divided into four tiers depending on the clinical categories included. These categories are Basic, Bronze, Silver and Gold. Some polices may have a ‘Plus’ or ‘+’ in the name (e.g. Basic Plus), meaning they cover more than the minimum required clinical categories without meeting the requirements for the next tier up. For example, a Silver Plus policy may provide cover for joint replacements which is ordinarily only covered by Gold tier policies.

Some insurance providers offer an age-based discount on hospital policies that save you money the earlier you take out cover. The discount ranges from 2-10% and is determined by your age (18-29) when joining an eligible policy. You can benefit from this discount until you turn 41 by continuously maintaining a hospital policy that retains your aged-based discount. Once you turn 41, the discount will be gradually reduced by 2% each year).

Extras cover

Extras cover provides benefits for out-of-hospital medical care like general dental, chiropractic, physiotherapyremedial massage and podiatry, among others.

The amount you can claim will be either a percentage or a dollar amount. These benefits are typically capped to an annual limit and can include sub limits, group limits and lifetime limits, as well as per person limits and policy limits.

Waiting periods are decided by the health fund and aren’t regulated by the government. Unlike hospital cover, pre-existing conditions won’t affect your waiting periods.

Standalone extras cover won’t help you avoid the LHC loading, MLS or benefit from an aged-based discount. However, choosing to go without hospital cover and only having extras won’t affect your eligibility for the Australian Government rebate.

Policies may vary between health funds, so make sure you check the relevant policy brochure for a full list of inclusions, exclusions, limits, benefits and restrictions.

Can I take out separate hospital and extras cover from different funds?

Yes, you can take out a hospital insurance policy with one health fund, and extras cover with another. This can be handy as some funds might have a hospital policy you like, but not offer a suitable option for the specific out-of-hospital treatments you’re looking for under an extras policy.

However, having one policy means you only need to worry about one premium payment, so it might be easier than having hospital and extras cover with different funds.

Does extras cover have tiers or levels too?

When it comes to extras cover, things work a bit differently. For instance, the services you can claim on and the amount of money you can claim are decided by the health fund, not the government. There are also no set categories like there are for hospital policies. As such, it becomes much more important to shop around to ensure your healthcare needs are met.

The level of extras cover will be specified under the policy, with the specific treatments listed on your policy brochure.


More information

Doctor explaining combined cover to patient

Do waiting periods apply to combined health insurance policies?

Combined hospital and extras do have waiting periods, just as standalone policies do. Once you take out cover, you’ll need to serve these waiting periods before you can claim on a specific service or treatment. When switching or upgrading to a higher level of cover you’ll only need to serve a waiting period for the new services offered.

You won’t be required to re-serve any waiting periods that you’ve already completed when switching or upgrading from an active policy. If you’re yet to complete any waiting periods, you’ll be required to serve the remaining time before claiming.

The Australian Government sets the waiting periods for hospital insurance, which differ depending on the treatment. For pregnancy and birth-related services and treatment for pre-existing conditions, your waiting period will be 12 months. For all other services (e.g. mental health services, palliative care), you can make a claim after just two months.

Waiting periods for extras are set by the health fund and can range from several months to several years, depending on the procedure or treatment. For example, orthodontics may have a waiting period of 12 months or longer.

Some health funds will waive waiting periods for certain services if you’re a new customer taking out an eligible policy, so keep an eye out for these deals!

Do I pay LHC on the full premium of a combined health insurance policy?

No, Lifetime Health Cover (LHC) loading applies to the base premium of your hospital cover, if you take out health insurance after 1 July following your 31st birthday. You don’t have to pay LHC on your extras premiums.

When you take out a combined health insurance policy before July 1 following your 31st birthday, the hospital insurance component will help you avoid the Lifetime Health Cover (LHC) loading.

Which kind of health insurance covers ambulance trips?

Emergency ambulance cover is usually included in hospital cover and some extras policies, depending on the insurer. Other insurers may also offer ambulance cover as a standalone policy. Even if your hospital or extras policy includes ambulance cover, it’s important to understand what’s included, as a standalone policy may be more comprehensive.

However, bear in mind, some Australians will have ambulance trips covered by their state or federal government. This includes:

  • Queenslanders anywhere in Australia
  • Tasmanians while they’re in Tasmania
  • Some pensioners, veterans and concession cardholders.

If health insurance includes emergency transportation, limits may apply to the number of trips that can be claimed within a 12-month period. You can learn more about the rules for each state and territory in our guide to ambulance cover.

Lana Hambilton, Head of Health Insurance

Meet our health insurance expert, Lana Hambilton

As Head of Health, Life, and Income Protection Insurance at Compare the Market, Lana Hambilton is passionate about simplifying the comparison process and educating Australians about the value and benefits private health insurance can offer and the critical role it plays in our medical system. She firmly believes that health insurance provides choice in one of the most important aspects of life – our health – and has experienced countless cases over the years where peace of mind comes through the ability to choose when, where, and who will treat you.

Lana has 15 years’ experience in the health insurance and insurance comparison industries. She’s also a Board Member of the Private Health Insurance Intermediaries Association.

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