Wondering how long a child can stay on a family private health insurance plan?
With the cost of living increases, many young adults are feeling the pinch, and health insurance cover is usually one of the first things to go when trying to cut back costs.
The good news is as of 2021, the federal government increased the age cap for adult children on their parents’ policy from 24 to 31. The age limit was also removed for dependants living with disability (NDIS participants).
So, whether you’re a dependant wondering if it’s worth staying on your parent’s cover, or you’re a parent wanting to get the most value out of your family health cover, read on.
Who Saves Money Here?
Children and full-time students up to the age of 31 can stay on the regular family health insurance policy for free.
However, it’s important to note that keeping older dependants and non-students covered may come with an additional cost, which can increase your premium by up to 30%, depending on the insurer.
In this scenario – you’ll be paying higher premiums to keep your young adult on your family policy
However, considering a single policy costs around 50% of a family policy, it makes financial sense for the adult-dependent. It gives you and them peace of mind that they’ll be covered for all their healthcare needs.
However, when the time comes to consider an extended family policy, it’s essential to carefully evaluate everyone’s coverage needs.
Consider Everyone’s Level of Cover Needs
Determining the appropriate level of cover is crucial when considering an extended family policy. It’s essential to assess whether the young adult in your family actually requires the same level of cover as the older family members.
For example, if you currently have a top cover policy (like Gold hospital cover), insuring your adult dependant on their own low to medium-cover (bronze or silver) policy could potentially be more cost-effective, especially if they don’t need all the benefits that come with top-tier hospital cover.
Not to mention if your family income is $180,000 or higher and you don’t receive the full health insurance rebate, by getting their own policy, your adult dependant would be eligible for the rebate and a youth discount.
Moreover, extras cover may not be necessary for young adults in good health. If they only require dental check-ups and occasional physiotherapy sessions, it’s often more cost-effective to pay for these services individually as needed.
Do All Health Funds Cover Young Adults Up to 31 on Family Policies?
The changes to the age cap for health insurance coverage are not mandatory for all private health funds, but most funds have chosen to adopt them.
It’s important to note that different health insurers may have varying age limits in place.
For instance, while some funds only allow young adults on family policies up to the age of 20, others may permit them to remain covered until their 32nd birthday.
Additionally, certain funds may have extended the age limit for students but not for non-students, or vice versa.
Furthermore, health funds have different conditions regarding dependants and family policies.
Typically, being married or in a de facto relationship is not allowed, but some insurers may also require the dependant to live with their parents and be financially dependent. There may be an earnings cap set by the insurer as well.
Additionally, some funds may require a combined policy for the entire family, while others may allow the dependant to take out their own extras policy to be covered under their parents’ hospital policy.
It’s worth mentioning that there can be variations in the definition of a full-time student, which often determines whether they can be insured for free. It’s crucial to carefully review the individual policy details.
The Lifetime Health Cover (LHC) Initiative
Let’s talk about the Lifetime Health Cover (LHC) loading Initiative and why it’s important for adults to take out their own private insurance before they turn 31 to avoid any issues.
The LHC Initiative is like a friendly reminder from the Australian government to encourage us to get hospital cover early and keep it going.
Here’s the deal: if you don’t have hospital cover with an Australian registered health fund by the 1st of July following your 31st birthday, and then you decide to get hospital cover later on, there’s a chance you might have to pay an extra 2% on your premiums for each year you didn’t have cover after the age of 30 year-old.
That’s why it’s a good idea to consider taking out your own private insurance before you reach that milestone. So, remember, it’s like a little nudge to take care of your health insurance before you turn 31 and avoid any potential extra costs down the road.
Avoiding the Medicare Levy Surcharge
Another important factor to consider when deciding whether to stay on your parents’ health insurance policy or get your own is the Medicare Levy Surcharge (MLS).
This additional fee is charged to high-income earners who don’t have private hospital cover. If you decide to stay on your parents’ policy, you can avoid the MLS as long as their policy meets the requirements.
However, if you choose to get your own health insurance policy, you’ll have the opportunity to tailor it to your specific needs and preferences.
By having an eligible private hospital policy, you can ensure that you won’t have to pay the MLS, giving you financial peace of mind and control over your healthcare choices.
So, weigh the options carefully and decide whether staying on your parents’ policy or getting your own policy aligns better with your personal circumstances and healthcare needs while keeping the MLS in mind.
What’s the eligibility criteria for young people to stay on family private health cover?
The eligibility criteria for young people to stay on family private health cover can vary depending on the insurer and the specific policy. Most commonly, however, to be eligible, young people are usually required to be unmarried and not in a de facto relationship. Some insurers may also require them to be financially dependent on their parents and living with them. Additionally, there may be age limits in place, with some insurers allowing young adults to stay on the family policy until they reach their 25th birthday, while others extend the age limit to 30 or even 31.
How long does it take to get your own cover?
Getting your own health insurance policy can be done in a day, but that doesn’t mean you’ll be covered for treatments that quickly. Waiting periods apply, from 3 months all the way up to 12 months, depending on the health service.
How long can a student dependant stay on their parents’ health insurance?
A student dependant can usually stay on their parents’ health insurance policy for 1 to 3 years, depending on the insurer and the specific policy. Contact your health insurance provider for further information.
What are some of the most popular family health fund providers in Australia?
Bupa, HCF, Medibank, AHM, and NIB are some of the most popular health insurance providers.
Can single parents get private health cover for their kids?
Yes, single parents can get private health cover for themselves and their children. They can choose a policy that suits their needs and budget.
What are the different family private health cover options?
You have the option to choose from hospital cover, extras cover, or combined hospital and extras cover.
Need Help Finding the Right Health Insurance Policy?
If you’re about to turn 31 and you’re looking for the best health insurance policy for your needs, don’t worry, we’ve got your back.
Simply use our free online tool below to get personalised health cover quotes from Australia’s leading health fund providers in minutes!