'Extras' cover "doesn't make financial sense"

30 March 2015

The CEO of the Private Health Insurance Administration Council, Shaun Gath, has admitted that people would be better off forgoing "extras" cover and simply pay for dental, optical and other treatments out of their own pocket.

In general, he contends, the amount of benefits the average person receives are less than the premiums they will pay over a 12 month period.

Echoing this sentiment, Australia's leading consumer group Choice argues that people should think about dropping their "extras" cover altogether in favour of hospital cover with the highest excess level selected.

This would result in a saving for the average family of $500 to $1000 a year which can be put in a savings account to pay for dental, optical or other general treatment if and when it occurs.

The lobby group for the private health insurance funds countered this suggestion with the argument that "younger, fitter, healthier members" who generally buy 'extras' cover are creating cheaper policies for everyone by subsidising older members who tend to claim more frequently.

(source: news.com.au)