Family Health Insurance: A Comprehensive Guide

Co-author: Ellie McLachlan

Looking for private health insurance for your family? There are many policy options out there provided by health funds, so how do you work out what’s best for you?

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The table below features a snapshot of hospital & extras policies on Canstar’s database with links to providers’ websites, sorted by Star Rating (highest-lowest) then by provider name (alphabetically). This has been formulated based on a family in NSW with no pregnancy cover and the policy holder under 35.

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How do I know what family health insurance cover to get?

Family health cover policies are designed to provide cover for families, both young and older. One of the biggest factors in choosing your family health cover is the age and lifestyle of your kids. If you have young or school-aged children, you’ll probably want to be prepared for all eventualities. Little kids can be susceptible to illness, not to mention accident-prone! That said, accidents and illness can happen at any age.

If your kids are getting older (i.e. teenagers and young adults), you may need to weigh up whether a greater level of extras cover could be worth considering, as your children’s medical needs may change. For example, they may need prescription glasses, physiotherapy or dental work. Of course, having a good level of hospital cover is also worth thinking about.

What does family health insurance cost?

Prices of family health insurance can vary between different health funds and the level of cover selected, but Canstar’s research for the 2017 Health Insurance Star Ratings found the average weekly premium for young families with hospital and extras cover was $108.

However, after the Federal Government’s Private Health Insurance Rebate of 25.934% (for families with combined income of $180,000 or less) is applied, this brings the average weekly premium down to $86. The income-tested benefit is a percentage rebate of your health insurance premium. It is worth noting it is means tested.

Furthermore, taking out private hospital cover should mean you are exempt from paying the Medicare Levy Surcharge, which is calculated at a rate of 1% to 1.5% of your income (after you earn a certain amount), in addition to the Medicare Levy of 2% paid by most Australian taxpayers (although this is reduced if your taxable income is below a certain threshold).

In 2017, these were the average annual premiums for hospital & extras policies during various life stages under a family policy:

2017 Health Insurance Premiums – Hospital and Extras Packages

Young Family – Non Obstetrics (<35) $4,301 $2,880 $4,319 $4,138 $4,155 $4,467 $4,117
Couples and Families – With Obstetrics $3,945 $2,910 $4,003 $3,869 $3,919 $4,007 $3,708
Established Families (36-59) $4,670 $3,197 $4,754 $4,476 $4,505 $4,862 $4,479
Based on packaged cover policies considered for 2017 Canstar Health Insurance Star Ratings. Premiums include Base Tier Australian Government Rebate of 25.934%. “Mature” profile only includes products that include cover for cardiac and hip/knee replacements. “Established” profile only includes products that include cover for cardiac.

Please note these are the average market premiums. It’s likely you could end up paying more or less than this depending on a variety of factors.

What are some common extras covered by family health insurance policies?

Extras can vary depending on your health fund and the level of cover you choose, but common ones (in addition to basics such as ambulance and dental) include orthodontics, pharmacy, accidental injuries, podiatry and if your family is about to grow, obstetrics.

How long can my kids stay on my family health insurance policy?

Until your kids turn 18, they can be considered dependents and are automatically covered under your family health insurance policy. Between the ages of 18 and 24, it’s up to your insurer to decide whether or not they qualify, which will usually be subject to certain requirements.

Such requirements could include your child being a full-time student or financially dependent.

If they don’t qualify, you may be able to keep your kids on your policy in return for a greater insurance premium, the size of which is again up to your health fund. From the age of 25 onwards, your kids are considered independent and will need to take out their own health insurance if they wish to have private health insurance. Check the details of your policy with your health insurer.

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