This is a comparison of two families who have extras cover, and use their cover every year for extras health needs.
Bennet family have private health extras cover and have various limits, caps and other limitations that apply to their cover. Although they do not have GAP to pay for some services with preferred providers. They end up having a GAP to pay. According to their cover they get 70% rebate up to the annual limit of the services they use.
They do not have the need for all services as they are all healthy and have needs coming up. They have been told their children may need dental braces.
Jensen Family are no different, they have their cover with XHP and have similar expenses to the Bennet family. Their children are older than the bennet children. With XHP the Jensen pay an annual fee of $199 and Scheme fees.
As GAP calculations are so varied between health funds due to
a. Type of cover extras standalone or combined (Standalone has lower cover and limits)
b. Where you live. (every state has a different fee)
c. Who your health provider is? ( health fund preferred or the one you want to see)
d. Service limits, fund rules and multiple combinations of them.
e. Time of the financial year or calendar year of the service.
To simplify the comparison the following assumptions have been used.
a. Average GAP as obtained from APRA quarterly statistical data June 2021. is 47.92%
b. The Jensen's pay all XHP fee from their accumulated balance
c. Period of calculation of data is 10 years.
d. Both families are paying the same amount for their extras cover.
Summary of Comparison
XHP costs are significantly lower
compared to extras health insurance costs where a "GAP is involved. XHP offers a saving of $5.17 per day
XHP costs are lower
compared to extras health insurance costs even when a GAP is not payable. XHP offers a saving of $1.11 per day.
Jensen family has $4,275.01, left for other extras health needs
or having a savings towards the braces their children will need.
If the Bennet family did not use their extras cover, they would lose $18,240 and have lost all the money paid out over time.
However, the Jensen family would have $12163 left for their needs after all fees and charges. Total cost per day $1.72