Cost Of Family Health Insurance Policies in Australia 2023

The cost of family health insurance will depend on the cover option you choose.

Children can stay on your policy for free until they turn 25 – or even older in some cases

Keep updating your family policy as your family grows/your needs change/or as your children get older

How Much Does Family Health Insurance Cost?

Not sure where to start when it comes to finding the right family health insurance? Family health insurance offers comprehensive coverage that extends to all members of your household. Whether it's your spouse, children, or student dependent, a single policy ensures that everyone receives the necessary protection and peace of mind. By choosing the right plan, you can rest assured that your family's healthcare needs will be met without the burden of excessive out-of-pocket expenses. One of the key advantages of family health insurance is its flexibility. It allows you to customize the level of coverage to suit your family's specific requirements. Whether you need coverage for essential hospital treatments, general dental care general dental care, chiropractic services, physiotherapy, or a range of other services, you can find a plan that caters to your family's unique needs. Finding the right family health insurance plan may seem like a daunting task, but we're here to simplify the process for you. Let’s get into it!

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WHAT IS THE COST OF FAMILY HEALTH INSURANCE?

The cost of family health insurance will depend on the cover option you choose. However, an average two-parent family spends about $97 per month ($1,167 a year) on health insurance. Your family’s overall health costs will depend on a few factors:

Premiums for private hospital cover
Premiums for extras cover
Premiums for extras-cover/ambulance/ ambulance cover
Medicare levy & medicare levy surcharge
Out-of-pocket costs for medical procedures not covered by the insurance
Qualifying Australian government rebates

Private Health Fund Premiums - Hospital Cover, Extras, and Ambulance

Tiered Coverage for Hospital Treatment

Since 1 April 2020,private health insurancefunds have adopted a tiering system for hospital cover, as mandated by the Private Health Insurance Ombudsman. The tiers include Gold, Silver, Bronze , and Basic, making it easier to compare coverage options. Each tier offers different levels of coverage for various medical procedures. For example, the Gold plan provides coverage for more complex procedures like plastic reconstructive surgery and weight loss surgery, while the Basic plan covers services such as rehabilitation and hospital psychiatric care.

Extras Cover for Additional Services

In addition to hospital cover, most private health insurance providers offer extras cover.Extras cover helps pay for services not covered by Medicare, such as dental care, physio, and more. When it comes to family health insurance, providers often offer competitive packages tailored specifically for families, allowing for greater flexibility in choosing the services you need.

Ambulance Cover for Peace of Mind

Ambulance cover is an elective add-on that you can include in your family health insurance plan. It can be obtained through a private health fund or the state ambulance service. Considering that children are more prone to accidents, having ambulance cover can provide peace of mind in case of emergencies. Whether you choose individual or family coverage, having this protection ensures that you wont face unexpected expenses in times of need.

Australian Government Rebates

For certain families that have lower combined income, the Australian Government will provide rebates to help you cover the cost of private health insurance. The rate of coverage is set on 1 April each year. You can check with the Australian Tax Office (ATO) to see if you qualify and the applicable rebate rate.

The Importance of Choosing the Right Cover

Selecting the appropriate hospital and extras cover for your family can significantly reduce your overall medical expenses. In Australia, individuals pay approximately 17% of total healthcare costs out-of-pocket, amounting to $29.8 billion annually or approximately $1,235 per person. By ensuring that potential medical conditions and emergencies are covered by your health insurance policy, you can save a considerable amount of money. What’s important to understand is that there are maximum benefit limits for different treatments. Knowing whether these limits apply on a per-person basis or are combined for the entire policy is essential when evaluating insurance options. Family health funds may also have additional restrictions on benefit payouts, such as allowing only one claim per person or two claims per policy. Carefully reviewing the policy details and understanding these limitations ensures that you make an informed decision that suits your family's healthcare needs and financial well-being.

What You Need to Know About the Medicare Levy & Medicare Levy Surcharge

Let's talk about the Medicare levy – a 2% tax that most Australians need to pay. This tax helps fund our public healthcare system, Medicare. By contributing to the levy, we ensure that essential healthcare services are available to everyone, regardless of their financial situation. It covers things like doctor visits, hospital care, and medical services provided by Medicare.

Medicare Levy Surcharge

Now, the Medicare levy surcharge is an additional tax imposed on individuals who earn an income above a certain threshold and don't have an appropriate level of private hospital cover. The aim is to encourage higher-income earners to take out private health insurance and reduce the strain on the public healthcare system.

How Does the Medicare Levy Surcharge Impact High-Income Families?

If your total household income exceeds $186,000 and your family doesn't have the necessary private health cover, you may be subject to the Medicare levy surcharge. This surcharge can range from 1% to 1.5% of your taxable income, depending on how much you earn. It's important to note that the surcharge percentage increases as your income goes up.

What's the Financial Implication?

The financial implications of not having the appropriate private health cover when your income exceeds the threshold can be quite significant. If you find yourself in this situation, your family could end up owing two thousand dollars or more per year in taxes due to the Medicare levy surcharge. That's definitely not something anyone wants!

What's an Appropriate Level of Private Hospital Cover for Families?

For families, having an appropriate level of private hospital cover means having an excess of $1,500 or less. Basically, if your family health insurance policy has a maximum excess of $1,500 or lower, you're meeting the requirements to avoid the Medicare levy surcharge.

Stay Informed and Take Action

To avoid any surprises and protect your family's financial well-being, it's crucial to understand your obligations and take proactive steps to meet the requirements of private health cover.

FAQs Cost of Family Health Insurance

1. What factors determine the cost of family insurance in Australia? The cost of family insurance in Australia is influenced by several factors, including the level of cover you choose, your family's specific healthcare needs, the type of services and treatments you want coverage for (such as physiotherapy, orthodontics, or vaccinations), and your taxable income. 2. Are there any discounts or benefits available for families with an ABN (Australian Business Number)? While having an ABN itself does not directly affect the cost of family insurance, there may be specific not-for-profit health funds or insurance providers that offer discounted rates or special benefits for individuals or families with an ABN. 3. Can I receive coverage for public hospital services with family insurance? Yes, family insurance plans typically provide coverage for public hospital services. However, it's important to review the details of the insurance policy to ensure that it includes the desired level of coverage for public hospitals, including emergency ambulance services and hospital excess amounts. 4. Can I upgrade my family insurance policy if our healthcare needs change? Yes, most insurance providers offer options for upgrading your family insurance policy to accommodate changing healthcare needs. Whether you require additional services, want a higher level of cover, or need to include new family members, upgrading your policy can provide the necessary flexibility to ensure adequate coverage. 5. How does lifetime health cover loading affect the cost of family insurance? Lifetime Health Cover (LHC) loading is a government initiative that encourages individuals to take out private health insurance early in life and maintain it. If you don't have private hospital cover by the age of 31, LHC loading may apply when you decide to take out insurance later. The loading increases the cost of premiums by 2% for every year you are aged over 30, up to a maximum of 70%. This loading is applied on an individual basis and can affect the overall cost of family insurance based on the age and circumstances of each family member.