What’s the difference between Hospital and Extras Cover? Do I need both? 

If there’s one question about Private Health Insurance that people ask more than any other, it’s this: what’s the difference between Hospital Cover and Extras Cover? And then they ask: do I need both? 

No one wants to pay for something they don’t need, so healthslips.com.au is here to give you all the accurate information you need to make an informed choice about whether to get Hospital or Extras Cover, or both.   

First, let’s break down the differences between these two main types of health insurance. 

What does Hospital Cover include?  

Hospital Cover is a type of health insurance which covers you for some, or all, of the costs of treatment at a private hospital, depending on the policy. Those expenses could include hospital accommodation, meals and theatre costs.  

Having Hospital Cover means you can choose where you’ll be treated and the doctors who’ll treat you. Keep in mind that it won’t cover all your treatment costs – there may be a Medical Gap to pay, which is the remainder of what isn’t covered by both Medicare and your Private Health Insurance put together. 

What is a Medical Gap? – find out in our simple article.

What isn’t covered under Hospital Cover? 

Hospital Cover doesn’t cover you for treatments that happen outside a hospital, such as visits to the GP, or specialist consultations or diagnostic tests that take place in a clinic. Optional treatments such as elective Cosmetic Surgery aren’t covered either.  

Read more about the common treatments not covered by private health insurance.

What does Extras Cover include?  

Extras Cover applies to healthcare outside a hospital that isn’t funded under Medicare. This includes services such as physiotherapy, dental, orthodontics, and glasses and contact lenses. 

Learn more about common treatments covered by Extras Cover. 

Keep in mind Extras Cover will cover only some, not all, of the cost. So you’ll only be reimbursed for a certain percentage of your costs, or up to a certain amount per year (or over your lifetime, in some cases). 

What isn’t covered under Extras Cover?  

There are some treatments the Australian Government excludes from Private Health Insurance. We refer to these treatments as ‘excluded treatments’ because they cannot be covered. Natural therapies, such as homeopathy, kinesiology and yoga, are not covered by Extras Cover. 

Read more about the excluded treatments.

What’s the difference between Hospital and Extras Cover? 

In a nutshell, Hospital Cover includes cover for surgeries or unexpected events that require hospitalisation. By contrast, Extras Cover is for health ‘maintenance’ costs, such as dental care or physiotherapy. 

Waiting periods will also be different. The maximum waiting periods for Hospital Cover are dictated by the government, whereas Extras Cover waiting periods are entirely up to each insurer to decide. Check out the breakdown of hospital waiting periods here. 

On the financial side, Hospital Cover is subject to the Lifetime Health Cover Loading. This means if you take out a policy after the age of 31, you’ll pay a loading of 2% on top of your premiums for each year you’re over 30, up to a maximum of 70% (this Loading stops after 10 years). The Lifetime Health Cover Loading only applies to Hospital Cover. It doesn’t apply to Extras Cover. 

If you’re taking out health insurance to avoid the Medicare Levy Surcharge (MLS), you’ll need Hospital Cover, however Extras Cover won’t affect this surcharge. If you don’t have Hospital Cover and you earn more than $90,000 as a single person or $180,000 for a family (plus $1,500 for each dependent child after the first one), you’ll have to pay the MLS at tax time. 

Find out more about the Medicare Levy Surcharge.  

One financial aspect that isn’t different is the Private Health Insurance Rebate – which means reduced insurance costs if you earn below the income threshold and meet the age criteria. This applies to both Hospital and Extras Cover. Find out if you’re eligible for the Private Health Insurance Rebate with our comprehensive overview, including a helpful table to calculate your rebate. 

Should I get both Hospital and Extras Cover?  

Ultimately, it’s your decision whether you need both Hospital and Extras Cover. We recommend you take into account your age, health, financial circumstances and family situation when deciding. Our How to choose Private Health Insurance Guide can help advise you on what to consider. 

Is Ambulance Cover included in Hospital and Extras Cover? 

Most insurers include Ambulance Cover in both Hospital and Extras Cover (or you can organise standalone Ambulance Cover). If your main motivation for getting health insurance is to cover you for ambulance services (which Medicare doesn’t cover), you’ll probably only need one policy. However if you live in Queensland or Tasmania, your state government provides free ambulance services, which means Ambulance Cover isn’t necessary. 

Trudie McConnochie

Writer and Researcher

Knowledge is power – that’s the guiding principle behind everything Trudie writes, and it’s a philosophy she brings to her work at healthslips.com.au. By breaking down complex information into easy-to-understand blogs and stories, she aims to empower Australians to make the best choices and an informed decision around private health insurance.

Trudie understands firsthand some of the complexity of private health insurance having moved to Australia from New Zealand and having to navigate a vastly different public healthcare system and health insurance structure.

Trudie holds a Bachelor of Communication Studies (journalism major) from the Auckland University of Technology.

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