Private health insurance limits
Expert tips for choosing the best health insurance for your needs
Our health insurance expert, Steven Spicer, offers some tips on choosing the best health insurance for your needs.
Steven Spicer
Executive General Manager – Health, Life & Energy
Consider what inclusions you need
Deciding what level of cover you need may seem overwhelming at first, but you can take some simple steps to help decide. Taking into account factors such as your family history, any health issues you have and what extras benefits you’re likely to use can help determine which inclusions you need and which you can do without. Also consider how regularly you’re likely to use each inclusion and your spending habits to help work out the right annual limits for you.
Know your limits
Understanding and keeping track of your limits (the total amount you can claim) and how much you can get back will help you get the most out of your policy. For example, a sporty person who regularly gets physiotherapy may want to consider higher limits with lower returns. Someone who only visits the physio once or twice a year may find a smaller limit with a higher return suits them better. The right choice comes down to what suits your needs best.
Plan for waiting periods
Whenever you add a new inclusion or upgrade your level of cover, you’ll typically need to serve a waiting period before you can claim that service. Some services, like physiotherapy and general dental, tend to have shorter waiting periods (typically 2 months), while other services can have waiting periods of 12 months or even longer. Knowing your waiting periods could help you get the most from your cover and lower your out-of-pocket costs.
What are claiming limits in extras cover?
Health cover limits, also called claim limits or benefit limits, are the maximum amount you can claim on a specific service or treatment within a set period (usually a year). Claim limits are a standard part of any extras policy, no matter which health fund you’re with.
The specifics of claim limits will vary between policies and health funds. As an example of a claiming limit, if you have a $500 annual limit on major dental, this will be the maximum amount you can claim on services and treatments that fall under this category. Any major dental procedure you have after reaching your limit won’t be claimable from your health fund until your limit renews.
What is extras cover?
Extras cover is one of the two main types of health insurance (the other being private hospital cover). Also known as ancillary cover or general treatment, it provides cover for some outpatient services, which are not usually covered by any Medicare benefits.
The services covered under your extras policy will be subject to a variety of dollar and percentage claiming limits. Knowing these limits could help you avoid being caught off guard by out-of-pocket expenses.
Types of limits
With extras cover, there are different types of limits that will apply. It’s common for a single policy to have multiple, different limits; for example, there may be both annual limits and sub-limits for specific services. It’s important you understand all the limits in your policy, as this will help you avoid having to pay unexpected out-of-pocket costs. Knowing how much you can claim also allows you to plan ahead and get the most out of your policy.
Percentage limits
Some health funds may have a percentage limit that covers a specific percentage of the costs for your treatment. For example, your policy may cover 70% of your dental treatment costs, meaning you’ll need to pay the remaining 30% out-of-pocket (a gap payment). In some cases, your policy may cover 100% of the costs up to the limit for specific items (such as prescription glasses). However, there will be conditions, for example, there will be a limit on how much you can claim on glasses in a year.
Annual limit
An annual limit is the maximum amount you can claim during either a calendar year, membership year (i.e. the anniversary of the date you joined) or financial year. So, for example, if you have an annual limit of $500 for physiotherapy, that’s the maximum amount you can claim for services and treatments that fall under that service inclusion. Annual limits can also have further limits, such as policy and sub limits.
Sub limits
Sub limits apply to a specific treatment within a service category. For example, you may have a $600 group limit for natural therapies, but can only claim a maximum of $350 of that amount on remedial massage. This second amount is the sub-limit.
Service limits
Some extras services will have a limit on how many times you can claim for a specific service per year. A typical example is that you can only claim one pair of glasses per year or a full set of dentures every three years.
Lifetime limits
Some extra services included in your policy may have a lifetime limit, which is the maximum amount you can claim over the course of your life no matter which health fund you’re with. The most common examples of lifetime limits are orthodontics and laser eye surgery. Once you reach this limit, you will not be able to claim these services again.
Per person limit
If you have multiple people under a single policy (e.g. a family policy), you may have a higher overall annual limit than a policy for a single person typically would. However, there may be a per-person limit on how much everyone on the policy can individually claim. For example, if each person can only claim a maximum of $250 for remedial massages.
Family limit
The family limit, also known as a policy limit, is the total amount that all members of your policy can claim over the course of a year. Family limits will be a part of Single Parent, Couple and Family policies. There will likely be per-person limits, which is the maximum amount of the family limit an individual can claim. Once the family limit has been reached, no further claims can be made until your limits renew, even if individuals haven’t hit their per person limits.
When will my limits renew?
In most cases, your limits will renew annually. This annual period will renew each calendar year, each financial year or each membership year. Your policy documentation will specify when your limits renew. Knowing when your limits renew can help you plan your services and avoid missing out on making the most of your health insurance.
In most cases, limits you don’t use within the year won’t carry over into the next annual period. For example, if you have an annual limit of $500 and only claim $300 this year, the remaining $200 won’t carry over to the next year to give you a $700 annual limit. Therefore, it’s best to use your limit while you can to get your money’s worth.
Why get extras cover?
Though extras policies will have a limit on how much you can claim, it’s important to understand that these are outpatient health services not covered by Medicare. Without any health insurance cover, you may be left to pay for the entire cost of your treatment out of pocket.
Some services that an extras policy can cover include:
- Dental services – including general dental, major dental, endodontics and orthodontics
- Optical
- Physiotherapy
- Chiropractic services
- Podiatry
- Psychology
- Non-PBS pharmaceuticals.
You can purchase combined hospital and extras health insurance policy if you’re looking for health insurance for hospital treatments and outpatient services.
What are the waiting periods on extras cover?
As well as claim limits, there will also be waiting periods that you’ll need to serve before you can make a claim. If you’re taking out a health insurance policy for the first time or upgrading your policy, chances are you’ll need to serve a waiting period for most inclusions.
Below are some of the typical waiting periods for certain inclusions:
| Inclusion | Typical waiting time |
|---|---|
| General dental (check-ups, small fillings) | 2 months |
| Optical (e.g. glasses and contact lenses) | 6 months |
| Major dental (e.g. crowns and bridges) | 1 year |
| Hearing aids | 1-3 years |
Unlike waiting periods for hospital cover, extras cover waiting periods aren’t set by the government, but rather the health funds themselves. This could mean a longer or shorter period of time than the figures listed above. Therefore, it’s important to check your policy documents to find out what the waiting periods are for each inclusion in your policy. However, if you’re switching policies to the same level of cover, you won’t have to re-serve waiting periods you’ve already completed.
Sometimes, health funds will waive waiting periods as part of promotions, but this will usually only be for services that usually have a shorter waiting period (e.g. general dental). It’s unlikely they’ll offer no waiting period for more expensive services like orthodontics.
Meet our health insurance expert, Steven Spicer
As the Executive General Manager of Health, Life and Energy, Steven Spicer is a strong believer in the benefits of private cover and knows just how valuable the peace of mind that comes with cover can be. He is passionate about demystifying the health insurance industry and advocates for the benefits of comparison when it comes to saving money on your premiums.