Private Health Insurance For Optical Extras

If you need glasses, you'll know how expensive a new set of frames can be! Especially if you have a high prescription.

And even if you don't wear glasses now, there's a chance that might change in the future. With 50% of Aussies wearing glasses or contacts, optical cover is an important consideration for many of us.

What is optical cover?

When we talk about optical cover, we're usually focused on general optical cover.

However, there are two types of optical cover to be aware of: general and major.

For general optical, you'll need to compare extras cover, while major optical is associated with hospital cover.

Vision in Australia

• 1 in 2 Australians wear glasses or contact lenses

• 55% of Australians have at least one long-term vision disorder

• The most common long-term vision disorders are short-sightedness and long-sightedness

• Vision disorders are more common among women

General optical cover

General optical falls under extras health cover.

It's a very common extra, so you're likely to find that it's included with most policies.

With general optical, you usually get cover for things like eye exams, glasses, and contact lenses.

Some policies will also offer cover for laser eye surgery and eye therapy.

When you choose an extras policy with optical cover, you're also getting cover for a range of other essential health services.

The more comprehensive your cover, the more you are likely to get back for each service.

Major optical cover

Major optical is for treatments like cataract surgery or other procedures related to the eye lens, like glaucoma.

The definition of major optical varies depending on the health fund, so read the terms and conditions carefully if you are interested in this type of cover.

In general, major optical is more focused on medical issues, not corrective vision. However, some funds do place corrective laser eye surgery in the major optical category

Waiting periods for optical cover

Most types of health cover have waiting periods, meaning that you must hold the cover for a minimum period of time before you can claim benefits.

Optical cover is no exception.

The good news is that many funds will recognise waiting periods you've already served.

In fact, they're required to do so with hospital policies, so you should never have to repeat a waiting period for the same or lesser level of cover.

If you're switching extras providers, ask your new fund if they are willing to accept the waiting period you've already completed.

Some are willing to do so.

Waiting period for optical

What’s included with general optical cover?

If you or someone in your household wears glasses or contacts, you're already in a good position to benefit from general optical cover.

But what exactly is included?

Remember that features and benefits of optical cover vary by fund, so this is a general overview of what you can expect.

For details, always refer to a specific policy.

Check-ups

Experts usually recommend an eye exam every one to two years.

Eye exams are covered by Medicare, so your optometrist may bulk bill for this service.

If you need further testing, such as a contact lens fitting, your health fund may be able to cover this.

Your eye exam may reveal that you have some vision issues, such as long sightedness or astigmatism.

Medicare does not extend to cover glasses or contact lenses; this is where optical cover steps in.

Prescription glasses

If you wear glasses, you probably know that prescriptions don't always stay the same.

And even if they did, you might want to change up your frames every once in a while!

Optical cover usually covers you in full or part for at least one pair of glasses each year, which includes frames and lenses.

Types of lenses covered may include:

• Bifocals

• Trifocals

• Single vision lenses

• Lenses

If you want to purchase additional pairs of glasses, you may still be eligible for a discount through your health fund.

Keep in mind that some funds will require you to purchase your glasses from an in-network provider.

This is an optometrist or retailer that has an agreement with the health fund.

Contact lenses

Depending on your level of cover, you may be able to claim full or partial benefits on contact lenses as well.

In many cases, you can order your preferred type of lenses online so check with the health fund first to be sure that they'll cover the purchase.

Prescription sunglasses

If you have 20/20 vision, unfortunately standard sunglasses won't be covered.

Prescription sunglasses from your health fund's listed eyewear retailers will often be refunded partially or fully, again depending on the varying policies across insurers.

Optical cover benefits and lifetime limits

So how can you know how much money you'll actually save with your optical cover? To find out, you'll need to look at the benefits and lifetime limits.

Benefits

Benefits of optical cover detail how much money you can claim back on your optical services.

Some funds offer 100% back on optical up to a certain amount. Other funds may offer anywhere from 40% to 70% back, depending on the level of coverage you choose.

A fund may opt to provide a set benefit, where they establish a dollar amount you can claim back on a certain service or product.

In addition to the benefits you can claim, you may also be able to access discounts at select retailers.

Optical cover limits

Limits are the maximum dollar amount you can claim for a particular service or range of services.

Your policy may use combined limits or sub-limits; lifetime limits may also apply.

• Combined limit: A maximum amount you can claim for a combination of services, such as optical + chiro + physio

• Sub-limit: Maximum amount you can claim for a specific service, such as optical. Sub-limits may also be subject to combined limits.

• Lifetime limit: Maximum amount you can claim for a particular treatment (such as laser eye surgery) over your lifetime.

Combined limits and sub-limits usually reset every year, while lifetime limits can follow you even if you switch funds.

Optical cover and taxes

Taking out health cover can reduce your tax liability in a number of ways.

If you have general optical cover through an extras policy, you may benefit from the private health insurance rebate.

If you also hold major optical cover through a hospital policy, you can avoid the Medicare Levy Surcharge and possibly the Lifetime Health Cover loading fee.

Medicare Levy Surcharge

The Medicare Levy Surcharge (MLS) is a government tax applied to taxpayers who earn above $93,000 (or $186,000 for families) and do not have eligible hospital cover.

If you hold an appropriate level of hospital cover or do not meet the income threshold, you should be exempt from this surcharge.

Lifetime Health Cover loading

Lifetime Health Cover (LHC) loading is a tax applied to people who do not hold an appropriate level of hospital cover.

It is only applicable if you are over 31 and have not held hospital cover through a private health fund from July 1 after your 31st birthday.

Private health insurance rebate

The private health insurance rebate is a government incentive to encourage people to take out health cover.

It is income-tested, so you'll receive a rebate on your health cover premiums based on a percentage of your earnings.

The good news is that it applies to both hospital, extras, and ambulance policies.

You'll be eligible for the rebate even if you only hold an extras policy.

Shopping for optical cover

Optical cover is a very common extra provided by most private health insurers, so you'll find it available from multiple health funds.

Here are a few things to consider when shopping for optical cover:

• Do you wear glasses or contact lenses?

• Do you have a personal or family history of medical eye problems?

• Are you interested in cover for corrective laser eye surgery?

• Would you be likely to use other extras services like dental or chiro?

• Is there an in-network optical provider near you?

Below are 3 relevant Bronze policies for a Single, living in NSW, aged 35 with an annual income of $97,001-$108,000 (Tier 1)

*Policies accurate as of 07-08-2024

Take advantage of the abundance of optical cover in the health insurance market and compare policies to find the best prices and offers for you.

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Chris Stanley is the sales & operations manager of health insurance at Compare Club. With extensive experience and expertise, Chris is a trusted leader known for his deep understanding of health insurance markets, policies, and coverage options. As the sales & operations manager of health insurance, Chris leads a team of dedicated professionals committed to helping individuals and families make informed decisions about their health insurance needs.

Meet our health insurance expert, Chris Stanley

Chris's top health insurance tips

• 1

  Australia’s public health system is world-class, but wait times for public hospitals can be long, inconvenient - and leave you living in constant pain while you wait.

• 2

  An appropriate private health insurance policy can speed up your surgery, relieving your pain sooner.

• 3

  Family health cover means your children are covered under the same policy as you.

• 4

  Many health insurance policies come with a 12-month waiting period for pregnancy-related cover, so it’s a good idea to get a family policy organized well before starting your family. This means your child will be covered from birth until at least their early twenties (depending on which health fund you select).