Health insurance for young adults - Do you need it?

Do young adults need health insurance?

Buying private health insurance may feel unnecessary when you’re young and healthy—but it can offer some benefits.

Parents’ health insurance may no longer cover you

Most health funds stop covering you under your parents’ policy when you turn 31, but there are other situations where you may be removed from your parents’ policy:

• You’re not currently studying in a full-time approved tertiary course
• You’re married or in a de facto relationship
• You are financially independent.

Check the Private Health Information Statement (PHIS) of your parents’ policy for the exact details, as different insurers have different rules.

Avoid extra tax

The Medicare Levy Surcharge (MLS) is a tax surcharge applied to taxpayers who earn above a certain income and don’t hold private hospital cover. For the 2024-25 financial year, singles earning over $97,000 and families earning over $194,000 may be liable. Getting an appropriate private hospital insurance policy can help you avoid paying this surcharge.

Lifetime Health Cover loading (LHC)

Once you turn 31, the Lifetime Health Cover loading starts to apply. Your premiums go up by 2% for each year you wait to get hospital cover. Note that this additional loading is removed after holding a hospital cover continuously for 10 years.

Access to faster treatment

Private health insurance can help you skip the wait times at public hospitals, especially for non-urgent treatments. You may also have the option to choose your own doctor and a private room, if one is available.

If you often use services like physiotherapy, chiropractic care, or dental, getting an extras cover can help with those costs.

Life planning

If you’re thinking about starting a family now, or in the future, remember that most health funds have a 12-month waiting period for pregnancy and birth related services. Getting insurance early means you’ll have the benefits when you need them.

As your life changes, review your policy to ensure your coverage matches your needs.

I’m almost 31 or close to finishing my studies–do I need health insurance?

If you are approaching the point where you will no longer be covered under your parents’ health insurance policy, and you would like to remain covered, you may want to shop around for your own policy.

Some health insurance providers offer deals and sign up incentives which may be worth considering. Some funds may also waive waiting periods if you get a new policy in place within 30 days or so of exiting your parent’s policy. Since waiting periods can be up to 12 months for some pre-existing conditions, this could be worth considering.

The cost of health insurance for young adults

If you’re still covered by your parents’ policy, then you may be lucky enough to not be paying anything for that coverage. If you decide to pay your own way and get a policy of your own, then the table below shows the average annual premiums for hospital and extras health insurance for young adults by state as well as nationally.

Average Annual Health Insurance Premiums For Young Adults Per State

← Mobile/tablet users, scroll sideways to view full table →

Source: www.canstar.com.au – 25/09/2025. Based on all combined hospital and extras insurance policies on Canstar’s database. The Australian Government Private Health Insurance Rebate, Base Tier for under 65s, of 24.288% has been applied to premiums. National average premiums based on state averages weighted by state population of insured persons, per APRA Quarterly private health insurance statistics (June 2025). Ambulance only, OSHC, visitor and corporate policies, as well as policies from restricted funds, are excluded. “Young Adults” profile includes all plans, without any minimum cover requirement.

Understanding the types of health insurance

It helps to have a clear understanding of the two types of health insurance coverage—hospital cover and extras cover (also referred to as ancillary cover).

You can purchase hospital cover and extras cover separately, or opt for a hospital and extras packaged cover that combines both.

Should young adults consider hospital cover?

Medicare covers the cost of clinically necessary public hospital treatment, but there can be waiting times for rooms or treatment, depending on your condition. Private hospital cover allows you to be treated as a private patient in a public or private hospital, your choice of doctor, and faster elective procedures. Many funds include ambulance cover, which can also be purchased separately.

Should young adults consider extras cover?

Extras cover helps with out-of-hospital medical costs that Medicare doesn’t, such as dental, optical, physio, chiropractic, remedial massage, psychology, and podiatry. Exactly what you’re covered for and what your annual claim limit will be varies from policy to policy, so always check the policy’s PHIS.

How do I know what health insurance to get?

Hospital health insurance policies in Australia are divided into four main tiers—Gold, Silver, Bronze and Basic—reflecting the minimum level of cover it provides. Combined cover plans can also include extras cover, offering both hospital and non-hospital services in a single package.
Once you understand the tiers, here are some other factors to consider:

• The cost: Graduates, for instance, may opt for basic cover, while more seasoned working professionals might choose to pay for more comprehensive plans. Keep in mind that government policies like the Lifetime Health Cover loading, Private Health Rebate and Medicare levy surcharge are designed to encourage you to have private health insurance if you can afford it. You may pay more in tax in your 30s and 40s if you decide not to have private health insurance now.

• Your lifestyle: For example, if you have a physically demanding job, play sports regularly, or enjoy outdoor adventures, you may benefit from physio, chiropractic, or podiatry cover. Even if your lifestyle is less active, dental and optical cover remain useful, as unexpected treatments can arise for anyone. Choosing extras that align with your habits helps make your cover more cost-effective and relevant.

• Relationship status: Your health insurance needs can change depending on your relationship. If you and your partner are thinking about starting a family, it’s worth considering policies that cover pregnancy and obstetrics. Even if starting a family isn’t on the horizon, some policies offer benefits that may still be relevant for couples or those sharing household responsibilities.