Family private health insurance policies

What types of family health insurance policies are there?

Family health insurance policies are designed to provide financial cover for you, your partner, and your children for medical treatments or appointments or care outside of the public Medicare system.

These policies generally fall under one of the following three types of cover:

Family hospital cover

Family hospital policies can cover treatment as a private patient in either a public or private hospital. They can include in-hospital treatment by a doctor of your choice, accommodation to stay in a ward, and theatre fees for surgery.

Health insurance policies that include hospital cover are sorted into four main tiers: Gold, Silver, Bronze and Basic. There may also be ‘plus’ versions of some of these tiers that also cover certain extra treatments. The tier of cover you choose for your family will partially determine how much you pay in premiums, and which hospital treatments and procedures you will be covered for.

Family extras cover

Extras cover (also known as ancillary or general treatment cover) can provide cover for all or some of the costs of non-hospital health services, such as dental and optical. Exactly what you’re covered for will vary between different insurers, but comprehensive extras policies typically offer a more extensive range of services and higher benefits than medium or basic policies.

Depending on your circumstances, extras benefits that may be worth considering for your family could include:

• Dental and orthodontic treatment
• Optical services
• Physiotherapy
• Pharmacy
• Podiatry
• Speech therapy
• Chiropractic treatment
• Professional diet and nutrition advice

Bear in mind that not all of these treatments will be available under every extras policy. This makes it worth checking with your insurer or reading the policy documents, such as the Private Health Information Statement, to check if a policy will meet your family’s needs.

Combined family hospital & extras cover

If you want to take out both hospital and extras cover for your family, you can do so through a combined policy. Some insurers may allow you to mix and match different hospital and extras policies to help meet your family’s unique needs.

What are some possible benefits of family health insurance?

Private health insurance may be a worthwhile investment for those looking for greater peace of mind, choice and flexibility when it comes to their family’s health and wellbeing.

Some of the potential benefits of taking out a family health insurance policy may include:

1. Claiming money back on health services not covered by Medicare

Private health insurance will generally be able to get you money back on health services that are not covered or only partially covered by Medicare. Without private health insurance, accessing health services such as dental, optical, and physiotherapy can be more expensive, potentially putting these treatments out of reach for some families. However, it is important to compare the total ongoing costs of having health insurance (e.g. paying premiums) with the potential benefits your family may receive.

2. Not having to pay the Medicare Levy Surcharge

According to the ATO, Australian families who earn more than $202,000 a year and don’t have private hospital cover may have to pay the Medicare Levy Surcharge (MLS).

The MLS ranges from 1-1.5% of your family’s taxable income. The MLS is charged on top of the 2% Medicare Levy but it doesn’t entitle you to any additional services.

3. Skipping public waiting lists

Having private health insurance may reduce the amount of time you and your family spend waiting to have elective surgeries.

4. Choice of doctor or surgeon

Depending on your choice of cover, private hospital insurance may give you the option to select your preferred doctor or surgeon to perform surgery or provide treatment when needed, even in a public hospital.

5. Private hospital rooms

Depending on the specifics of your policy, you and your family members may be able to request a private room when admitted to hospital, subject to availability. However, it may be worth checking what your policy covers before choosing a private room over a shared one, as not all hospital policies will cover the full cost of a private room.

What are some of the potential downsides of taking out health insurance?

As with any form of insurance, health insurance can offer benefits to families, but it’s not without its drawbacks. Some of the potentially negative aspects of health insurance that you may want to consider include:

1. The cost

Private health insurance can be expensive, especially if it’s for a family rather than a single person. Canstar research shows that a family could pay over $6490 a year in hospital and extras health insurance premiums on average. If you don’t end up claiming any benefits, you could be paying more for peace of mind than for actual medical services.

You may want to consider whether this peace of mind is worth the cost of family health insurance, especially considering that premiums usually increase each April. Some choose to forgo private health insurance and rely on Australia’s robust public health system, although keep in mind that services like dental care, typically included on extras insurance, are not covered by Medicare.

2. Exclusions

Like other forms of insurance, health insurance policies have exclusions. The less you pay for cover, the more exclusions there may be. If you decide to take out health insurance, you may find that you can’t afford a policy that offers the cover you want. Alternatively, in the event of injury or illness, you may find that your health insurance doesn’t cover you for the treatment or medical assistance you require.

3. Waiting periods

There will usually be a waiting period that you will need to serve after taking out health insurance before you can make a claim for certain treatments. These waiting periods may range from several months to more than a year depending on the treatment. There are some circumstances that allow you to waive or skip these waiting periods.

4. Out-of-pocket costs

Even with a comprehensive health insurance policy in place, a hospital stay could leave you with significant out-of-pocket costs, such as your policy excess, and potentially a gap payment as well. While you may have paid more for the same treatment without health insurance, it may be worth considering if the ongoing cost of your health insurance premiums outweighs the amount you may save in out-of-pocket costs if injury or illness strikes.

How to find the best family health insurance in Australia

The best family health insurance policy for you and your loved ones may be different to what would be best for a different household. Every family is different, with different financial situations and personal goals.

Family health insurance policies are designed to provide cover for families of all types and sizes. The best policy to choose may be affected by a range of factors, such as the age and lifestyle of your family members, as well as their medical history.

To help you work out which family health insurance policy may be best for you, consider the following factors:

• What cover does your family need? For example, does anyone in your family have a chronic condition which may make them prone to certain illnesses or injuries?
• What optional extras do you want to access? Depending on the policy, you may be able to cover your family for general dental, speech therapy, podiatry, prescription glasses, physiotherapy or orthodontic work such as braces.
• How much can you afford to pay in premiums? The more you can afford to pay, the more cover you may be able to access, though it’s possible to overinsure and not get the full value of your policy.
• What bonus offers and deals are you interested in? Some insurers may offer incentives to new members such as bonus rewards points or free access for a limited time, though you should consider the value of the rest of the policy before making any decisions.
• Are there exclusions or waiting periods that could cause issues for you? If you require a specific treatment soon, keep in mind that some policies may not cover you, or may require you to wait before you can make a claim.
• Are you happy with the insurer’s customer service? Consider checking reviews and consulting friends and family to get a better idea of if an insurer may be right for you.

It may also be worth considering your family’s plans for the future. If you are a growing family, then purchasing or upgrading to a hospital policy that includes pregnancy cover, or an extras policy that covers antenatal and/or postnatal treatment may be worth considering. Gold-tier hospital policies are the only health insurance policies legally required to offer pregnancy cover by default, however some Silver or Silver Plus policies may also offer it. Keep in mind there’s often a waiting period of 12 months for pregnancy-related care.

Once you have a better idea of the kind of health insurance policy you’re interested in, you can use Canstar’s tables to compare a variety of options from different insurers side by side. Using the filters, you can narrow down the selection to create a shortlist of options that better suit your family’s needs.

Canstar Star Ratings and Awards

Looking for an award-winning product or to switch providers or brands? Canstar rates products based on price and features in our Star Ratings and Awards. Our expert Research team shares insights about which health insurance products offer 5-Star value and which providers offer outstanding value overall. We also reveal which providers have the most satisfied customers in our dedicated Customer Satisfaction Awards.

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