Hospital Cover vs Extras Cover: What’s the Difference?

A common question that pops up for most Australians when considering private health insurance is: should I go for hospital cover or extras cover?

While it might seem like an ‘either-or’ choice, it’s a bit more complex than that.

The best pick for you will depend on your personal circumstances, lifestyle, and health requirements.

But before we get to that, let’s break down what each of these covers is all about.

Hospital Cover

Simply put, hospital cover is there for when you need to be admitted to a hospital. It can help pay for a private room in a private or public hospital, in-hospital treatments, and surgeries, while also enabling you to choose your own doctor. It’s worth noting that all hospital policies come with waiting periods and may have exclusions for certain procedures, so always check the fine print.

Extras Cover

On the other hand, extras cover or extras insurance focuses on services generally not covered by Medicare. These might include physiotherapy, dental check-ups, optometrist appointments, podiatry, chiropractic treatments, and a few additional extras such as orthodontics and even hearing aids or contact lenses. Extras services usually have annual limits, which means there’s a cap on the amount you can claim back within a financial year.

Thinking About Out-of-Pocket Costs

One of the major considerations when picking between hospital and extras cover is out-of-pocket expenses.

Hospital cover can help limit your out-of-pocket costs for in-hospital treatments. However, keep in mind that private hospital treatments can sometimes lead to high out-of-pocket costs if your health insurance policy has exclusions or if your provider charges more than the Medicare Benefit Schedule fee.

Extras cover can help manage out-of-pocket costs for out-of-hospital services. The level of cover and the rebates you receive will depend on your policy and the health fund. The better your level of cover, the higher the rebate and more services you’ll have access to.

Government Factors: LHC and the Medicare Levy Surcharge

Choosing between hospital and extras cover can also impact potential tax liabilities. Australians without adequate private patient hospital cover who earn over a certain income threshold need to pay the Medicare Levy Surcharge (MLS).

In addition, there’s the Lifetime Health Cover (LHC) loading to consider, which applies a 2% loading on top of your hospital premium each year you’re aged 31 or over, and don’t have hospital cover.

Is It an Either-Or Situation?

The debate isn’t necessarily about whether hospital cover is ‘better’ than extras cover, or vice versa. Both types of cover provide different benefits and can complement each other well.

However, by combining hospital and extras cover, you can enjoy a comprehensive health insurance package that caters to all aspects of your healthcare needs. Hospital cover ensures financial protection during hospitalisation, while extras cover offers benefits for various ancillary services. Together, they provide a more holistic approach to healthcare coverage, giving you peace of mind knowing that both your in-hospital and out-of-hospital needs are taken care of.

It’s worth noting that the choice between hospital cover, extras cover, or both depends on your individual circumstances, lifestyle, and health requirements. Assessing factors such as your medical history, anticipated healthcare needs, and budget will help you determine the most suitable combination of covers for your specific situation. Remember that health insurance policies can be reviewed and adjusted annually to align with any changes in your healthcare needs.


What is the difference between hospital cover and an extras policy?

Hospital cover is designed to cover expenses related to hospital admissions, treatments, and surgeries. On the other hand, extras cover focuses on services not covered by Medicare, such as physiotherapy, dental check-ups, and chiropractic treatments.

What does hospital insurance typically include?

Hospital cover can include benefits for private hospital accommodation, in-hospital treatments, surgeries, and the ability to choose your own doctor. However, it’s important to review the policy to understand waiting periods and any exclusions.

What services are covered by extras cover?

Extras cover usually includes services like physio, dental check-ups, optometrist appointments, podiatry, and chiro treatments. Some policies may also offer additional extras such as orthodontics, hearing aids, or contact lenses.

How do out-of-pocket costs differ between hospital cover and extras cover?

Hospital cover can help limit out-of-pocket costs for in-hospital treatments, but it’s important to check for exclusions and potential higher charges by providers. Extras cover helps manage out-of-pocket costs for out-of-hospital services, with the level of cover and rebates depending on your policy and health fund.

How does choosing between hospital cover and extras cover impact taxes?

Choosing adequate hospital cover is important to avoid the Medicare Levy Surcharge (MLS) for Australians earning over a certain income threshold. Additionally, not having hospital cover can result in the Lifetime Health Cover Loading (LHC) loading, which increases your hospital premium each year if you’re aged 31 or over. Not to mention having hospital health insurance may entitle you to the Australian government health insurance rebate come tax time.

Does extras cover include mental health services?

While it depends on the specific policy, extras cover can include benefits for mental health services such as psychology or counselling consultations. Review your policy or contact your health fund for more information.

Is ambulance cover included in hospital or extras cover?

Ambulance cover typically falls under extras cover. However, it’s important to check with your health insurance provider to confirm if ambulance cover is included in your policy or if it needs to be purchased separately.

Can private health cover vary between different states in Australia?

Private health cover is generally consistent across Australia. However, certain state-specific policies or initiatives may exist, such as in New South Wales (NSW). It’s advisable to check with your health fund or explore any state-specific options if applicable.

Looking for a Combined Health Insurance Policy?

In the end, choosing between hospital cover and extras cover (or choosing both!) comes down to understanding your health needs, financial situation, and life stage.

If you need help finding the right hospital and extras policy for your needs, let CHI do the hard work for you. Use our handy online tool to compare quotes from Australia’s leading health fund providers in minutes and find the right policy for you.