Even Superheroes Need Health Insurance

Young adults don't usually rank private health insurance highly on their list of expense priorities. This is in part due to their delusions of invincibility combined with limited financial resources. As we’re all too well aware however, even superheroes aren’t completely invincible. We mere humans must therefore take certain precautions such as paying for private health insurance to help us choose our own hospitals and doctors and speed up treatment to recover our full powers.

Between ages 21 and 31, young adults are in a virtual limbo regarding the need for private health cover. Up to age 21, most health funds will allow young adults to continue to shelter under their parent's umbrella as dependents. If they are enrolled in an approved university course and haven’t gotten married or formed a de facto relationship, most funds will allow them to continue their dependent status at no extra cost until they are 25.

If higher learning isn’t on the books, young adults can still get private health cover as part of their family membership by changing to a family with non-dependent children. There is a surcharge for this change of status but this is usually much less than they would have to pay if they purchased singles cover.

After age 31, young adults are penalized by an extra 2% surcharge for each year they delay buying private hospital insurance. This is due to the Lifetime Health Cover Legislation introduced by the federal government to encourage people to take out hospital cover earlier in life.

By age 31, most people have outgrown the naïve notions of invincibility but the cost of private health insurance may still be a significant financial hurdle. Health funds are well aware of this fact and in response usually have a suite of products available which allow consumers to trade the breadth of cover and the amount of out-of-pocket expenses to get more affordable health insurance cover.

Hospital

The most obvious bargaining chip when buying hospital cover is the trade-off with excess or co-payments which are paid per visit or per day respectively when a patient is admitted to hospital. CANSTAR CANNEX research has revealed that a single person buying hospital cover can save on average $140 - $250 each year (14%-18% discount) simply by taking on a $500 excess depending on which state they live in. If they are willing to take on an excess of $1,000, they can save between $290 - $380 each year on premiums (30%-34% discount).

Extras Cover

A similar trade-off can be made with extras cover to reduce the premium but this relies heavily on personal preference. Some people want the full breadth of cover for things like alternative therapies and orthodontics while others are interested only in the basics such as dental and optical. The amount you can save will depend on the areas of cover you're willing to give up to secure a lower premium.

Most people spend their twenties testing the limits of their invincibility which sometimes involves putting themselves in harm's way. Sometimes they're simply unlucky with their health. While health insurance may not instinctively be a high priority when allocating limited resources, young adults can still buy reasonable health insurance coverage at an affordable price if they're willing to make some trade-offs.

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