A quiet mistake is costing millions of Australians hundreds of dollars each year—often without them realising it. As health insurance premiums rise again, many policyholders are paying for benefits they barely use. It’s a small oversight on paper, but over time, it can add up in ways that are hard to ignore.
Health Insurance Extras in Australia Often Go Unused
New data reveals that around 46% of Australians with private health insurance are not fully using their extras cover. These policies typically include services like dental, physiotherapy and optical care. According to research from Finder, many policyholders leave a portion of their annual limits untouched. Physiotherapy is among the least used, with only 22% of people reaching their limit. Dental and optical follow, at 33% and 34% respectively.
Given that extras cover operates on a “use it or lose it” basis, any unused benefits effectively expire at the end of the year.
Health Insurance Costs Add Up to $700 a Year
The financial impact can be more significant than it seems. The average extras policy costs around $58.12 per month, or just under $700 per year. For those not using their benefits, that amount represents money spent without clear return, explains Yahoo Finance. Over several years, the total can become substantial—especially when combined with rising premiums.
Older Australians are particularly affected. More than half of Baby Boomers (52%) admit they did not fully use their extras limits, suggesting the issue is widespread across age groups.
Health Insurance Premiums in Australia Set to Increase
From April 1, health insurance premiums will rise by an average of 4.41%, marking the largest increase since 2017. Some policies will see sharper jumps. Analysis shows that certain Gold-tier policies across major insurers could increase by around 13.3%. In practical terms, this could add roughly $116 per year for hospital cover, or up to $158 annually for combined policies that include extras.
These increases come at a time when many households are already reviewing their expenses, making the value of each policy more closely scrutinised.
Health Insurance Review Could Help Reduce Unnecessary Spending
Experts suggest that regularly reviewing policies can help avoid overpaying. This includes checking whether extras are actually being used, adjusting cover levels, and comparing alternative plans. Even a basic extras policy can offset its cost if key services—like two dental visits per year—are used. Without that usage, however, the value quickly declines.
There is also the option of paying premiums annually in advance, which can delay the impact of price increases. Still, this approach may lead to higher costs later, depending on future adjustments.
A Growing Gap Between Cost and Usage
What emerges is a simple mismatch: rising costs on one side, and underused benefits on the other. For many Australians, the issue is not whether they have insurance—but whether they are actually making the most of it. As premiums continue to increase, that question becomes harder to ignore.
