Should I get extras cover, hospital cover or both?

There’s no one-size-fits-all answer. What’s right for you depends on your health needs, how often you use certain services, and what you’re comfortable paying for. This guide breaks down the difference between hospital and extras cover, when you might need one without the other, and how to decide what’s worth it for you.

Hospital cover

Helps with the cost of treatment as a private patient in hospital.

You can:

• Skip public waitlists

• Choose your own specialist

• Stay in a private room (where available)

It covers things like surgery, overnight hospital stays, and sometimes day procedures. It also helps you avoid tax penalties like the Medicare Levy Surcharge and, depending on when you take out your cover, the Lifetime Health Cover loading.

Extras cover

Pays a portion of the cost of out-of-hospital health services, including:

• Dental

• Optical

• Physio

• Chiro

• Remedial massage

• Psychology

Extras cover isn’t about emergencies or big surgeries, it’s for routine health and wellbeing services that Medicare doesn’t usually cover.

Hospital cover is often the more “serious” part of private health insurance. Many Australians take it out to:

• Avoid tax penalties (primarily the MLS)

• Protect against large, unexpected costs (e.g. surgery)

• Get faster treatment if something goes wrong

It’s useful even if you’re fit and healthy, because if you do end up needing an operation or hospital care, the costs can run into the thousands.

People who skip extras cover often say:

• “I don’t go to the dentist or physio much.”

• “I’d rather pay out of pocket when I need something.”

• “I’m just getting hospital cover to avoid the Medicare Levy Surcharge.”

Tip from Alfie: Even a Basic Hospital policy can help you avoid tax and give peace of mind for unplanned health events, just check the treatments it includes (it’s not many).

Extras cover can be appealing if you use a few specific services regularly, especially if they’re expensive without cover.

For example:

• A dental check-up and clean can cost $200–$300 a pop.

• A pair of prescription glasses might set you back $300 or more.

• Physio sessions can be $100–$200 each.

If you use these services often, the annual claim limits on extras cover might help offset the cost.

People who skip hospital cover often say:

• “I’m young and healthy, I’ll use the public system if I need surgery.”

• “I don’t earn enough to worry about the tax penalties.”

• “I just want to save money on dental and optical.”

Tip from Alfie: Just make sure the cost of the extras policy doesn’t outweigh the benefits you actually use, a lot of people overpay for services they rarely claim.

For some people, a combined policy (hospital + extras) offers the right balance of peace of mind and value.

It can be a smart move if:

• You’re starting a family and want cover for pregnancy and extras like prenatal physio

• You’re managing a chronic condition and need both hospital support and regular allied health services

• You use dental, optical or physio services every year and want to avoid tax penalties or reduce your wait times in hospital

Just make sure you:

• Understand what level of cover you’re getting for both

• Avoid “junk” policies with high costs but very limited inclusions

• Don’t double up on services you won’t use

Still unsure which option is right for you? Ask yourself:

Do I earn more than $97,000 (single) or $194,000 (couple)?
→ If yes, hospital cover might help you avoid the Medicare Levy Surcharge.

Am I over 31 and don’t yet have hospital cover?
→ You could be hit with Lifetime Health Cover loading if you delay.

When was the last time I went to the dentist, physio, or optometrist?
→ If you don’t use these services regularly, extras might not be worth it.

Do I want to be able to choose my own specialist or avoid public waitlists?
→ Hospital cover gives you that flexibility.

Am I mainly looking to save money, or for better access to care?
→ Extras helps with small, regular costs. Hospital cover helps with big, unexpected ones.

Case 1: Olivia, 34, earns $120,000 and rarely uses extras

• She takes out Basic Hospital cover to avoid the Medicare Levy Surcharge

• Skips extras, as she only goes to the dentist once every two years

• Estimated annual saving: ~$600 compared to combined cover she wouldn’t use

Case 2: James, 28, student with no hospital cover

• Gets mid-level extras with generous dental and optical benefits

• Doesn’t need hospital cover yet, and earns under the MLS threshold

• Makes the most of included physio after a sports injury

Case 3: Sam and Priya, 36, planning for a baby

• Choose a Gold Hospital policy with pregnancy cover

• Add comprehensive extras for physio, dental and massage

• Combine policies for complete cover during pregnancy and beyond

Extras cover can be helpful, but it’s not essential for everyone. Hospital cover can protect you from big bills and tax penalties, but you won’t get everyday benefits like dental or optical unless you add extras.

The smart move? Pick cover based on what you’ll actually use, not what looks fancy on a brochure.

Want help choosing? Alfie can compare personalised options based on your needs, and help you avoid paying for stuff you’ll never use.