A radical new ‘extras cover’ health insurance policy launched in last month is set to benefit optical patients and optometrists in Australia, its founders say.
Mr John Connor and Mr Reece Frazier, former actuaries of the insurance industry, have founded ExtrasJar, based on a new health insurance business model they say is designed to benefit patients and health providers.
Currently 12.5 million Australians pay $12 billion towards ‘extras cover’ and only get $5.6 billion back in benefits, according to the pair.
“When you buy health insurance extras, that’s exactly what’s happening. You’re paying extra,” Connor, a senior insurance manager with more than 20 years’ experience, said.
With ExtrasJar, any unused extras money is rolled over to the following year, and it accumulates each year until a policy holder needs to spend it on treatments such as dental, physio or optical.
“It’s the customer’s money to spend on the treatments they want – not what the health insurance company says they can spend it on. Think of it like a forced savings plan where a nominated amount gets transferred into an account for them to spend on their health when they need it. It’s their money – not the insurance company’s,” Connor and Frazier said.
The business model, which the pair believe to be a world-first, rewards people who are healthy with a nest egg they can draw upon when they need it most.
“If customers have enough money accumulated in their kitty – they can pay for the treatments in full. And it’s easy to pay their dentist, physio or optometrist with the ExtrasJar digital Mastercard,” they said.
ExtrasJar, which has been granted its own Australia Financial Services Licence, launched in July 2022. To help grow the business so more Australians can benefit from the radical approach to health insurance, co-founders Connor and Frazier are offering potential investors the opportunity to buy shares in the company via a Birchal equity crowdfunding raise.
“For the last 20 years, my career has been spent working as a senior actuary for Australia’s biggest banks and insurance companies – so I know how much money is being taken from hardworking Australians – and it’s sickening,” Connor said.
“On average, Australians are losing more than half of their health insurance extras. That’s approximately $514 each per year and more than $10,280 over 20 years. If policy holders choose to leave ExtrasJar, they get all the money they have accumulated in their extras cover nest egg back – no questions asked,” he said.
ExtrasJar is also changing the way customers pay for private hospital cover. It does this via a self-deposit feature.
“ExtrasJar hospital cover is just like paying a rental bond to a landlord before you move in,” Frazier said.
“If you damage the house, the repairs will come out of the bond money. It’s the same thing with ExtrasJar, except we call the ‘rental bond’ a self-insurance deposit, which brings down your private hospital cover premium. If you don’t go to hospital that year, you pay less. Any unused deposit is rolled over and used to lower future premiums if there are no claims,” he said.
Frazier said the average Australian is paying around $2,176 for private hospital cover.
“With ExtrasJar hospital cover, once you’ve paid your $1,000 self-insurance deposit, you could potentially reduce your annual hospital cover by up to 40%. And every year after that, you’ll pay the same reduced rate, so long as you don’t need to go to hospital. And if you do need to go to hospital – you’re completely covered, and we will draw on your $1,000 deposit as a form of excess payment. And just like our extras cover, if you wish to end your hospital cover with ExtrasJar – you get your original $1,000 self-insurance deposit back – no questions asked.”
According to its founders, at its core ExtrasJar is a financial services company that blends the best of banking, investment, and insurance to deliver innovative products that cut down the cost of everyday living. The company’s revenue comes from the commission on premiums and fees on investment products.
Earlier this year, ExtrasJar completed a seed round with Sydney Angels as the lead investor, giving it access to a network of advisors to help support the company through its build phase.
Mr Adrian Bunter, management committee member Sydney Angels and executive director, Venture Advisory, said ExtrasJar in shaking up the insurance industry.
“Over the last two years I have had access to over 2,000 early-stage investment opportunities, and out of all those, ExtrasJar stood out as one of the best companies I’ve seen,” Bunter said. “We are expecting big things.”
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