Health insurance for kids: how it works and how much it costs

Coverage for kids is generally included in family health insurance policies, but there are a few things you should look out for if you want to make sure your kids are covered.

Couples looking to start a family may be interested to know how having a child could affect their health insurance premiums. The good news is that if you stay on the same policy, having a child and adding them to your policy may not affect your premiums by too much. However, for some people it may cause a rethink of the level of cover you need, which may affect the cost.

Here’s an overview of how health insurance for children works, how much it costs, and some of the factors to consider before taking it out:

How do I get health insurance for my children?

If you have, or are planning on having children, you can include them on your health insurance by taking out a family health insurance policy. A family health insurance policy will generally provide cover for you, your partner if you have one, and your children (up to the age of 21, or 25 if they’re a full-time student). Children are not covered if they marry or enter a de facto relationship, and after they turn 25 under current rules. They may also need to re-serve any waiting periods if their cover lapses. Once changes announced in the 2020 Federal Budget are introduced, at insurers’ discretion, families may be able to keep their adult children on their health ­insurance policy until they are 31, or for life in the case of a dependent with a disability.

If you don’t have a partner, you may consider adding your children to your health insurance by taking out a single parent health insurance policy.

You may want to contact your health fund for details on how to add children to your health insurance policy.

Will it cost me anything to add a child to my health insurance policy?

Most private health insurance funds in Australia tend to charge similar premiums for family health insurance as they do for couples health insurance. This means that if you currently hold a couples health insurance policy, the addition of children to your policy, or changing to a family policy, will generally not cost you much more in premiums per month if the level of cover remains the same.

According to Canstar Research, for hospital and extras policies, the cost difference on average is $164 annually, or around $14 per month. For policies that include obstetrics, the cost difference for moving from a couple to family policy is only $7 per year on average.

National average annual hospital & extras premiums for couple and families

Couple Family
All policies $4,383 $4,547
Policies including obstetrics $5,423 $5,430

Source: www.canstar.com.au – 6/10/2020. The Australian Government Private Health Insurance Rebate Base Tier for under 65s of 25.059% has been applied to premiums. National average obtained as a weighted average of state averages, weighted by number of insured persons.

How can I decide what level of family health cover is appropriate?

The level of cover best suited to your family’s needs will depend on multiple factors, including the age of your family members, your medical histories, and whether you plan on having any more children. There are four main tiers of hospital cover available to Australians: Basic, Bronze, Silver and Gold, as well as ‘Plus’ options for some of these, which offer more than the minimum level of cover required under the tier. Additionally, you may decide to add extras cover onto your hospital policy.

To decide which level of health insurance is appropriate for your family, consider what you currently need cover for, and what you may need cover for in the future. Some common considerations for families may include:

If you require cover for pregnancy, you will likely need to take out a Gold-tier hospital policy, as they are the only policies required to provide cover for pregnancy. However, you may also want to consider taking out an extras policy which provides cover for antenatal and/or postnatal treatment.

It’s also worth considering the fact that you, your partner’s (if you have one), and your children’s medical needs may change over time. Your children may require glasses or orthodontic work at some point, so you may want to take this into account when choosing a policy.

Based on your personal circumstances, finances, and family needs, it may also be more affordable to consider separating your policies. If you are pregnant, for example, keeping your partner’s insurance separate until after the delivery could help you avoid paying for an unnecessary higher level of obstetrics cover for them, as well as for you.

How much does family health insurance cost?

How much you pay for a family health insurance policy will depend on several factors, including the level of cover you choose to take out and whether or not you or your partner (if you have one) have ever held health insurance, as this will determine whether or not you pay Lifetime Health Cover Loading.

To give you an idea of what you might pay, the table below displays the average annual premiums for family hospital and extras policies in different states and territories:

NSW VIC QLD SA WA TAS NT
All policies $4,549 $4,648 $4,643 $4,503 $4,294 $4,484 $3,843
Policies with obstetrics $5,419 $5,511 $5,528 $5,392 $5,245 $5,324 $4,819

Source: www.canstar.com.au – 6/10/2020. The Australian Government Private Health Insurance Rebate Base Tier for under 65s of 25.059% has been applied to premiums.    

5 points to consider for family health insurance

There are a handful of points you may want to keep in mind when considering taking out a new family health insurance policy, or adding children to your existing policy:

  1. For health insurance purposes, a dependent child is generally defined as an unmarried person under the age of 18 years. However, health funds can extend that age limit for dependent children, providing the child is still a full-time student and remains unmarried, or not in a de facto relationship.
  2. Many providers don’t charge higher premiums for family health insurance vs couples health insurance. So, if your premiums may change if you add a child to your policy, you may like to review your policy closely and consider your options.
  3. Check that your policy provides cover for pregnancy if you are planning on having a baby and want to use relevant private hospital and/or medical services, non-medical and allied health services outside a hospital as part of your care.. There’s usually a 12-month waiting period on pregnancy and birth-related services, so you’ll need to make sure your policy provides this level of cover around three months before you and your partner conceive.
  4. If you and your children are likely to have medical needs that won’t be covered by a hospital policy, consider if an extras policy may take care of these needs. Check to see if the policy offers no-gap extras benefits for children, on services like dental checkups, x-rays etc.
  5. If you’re taking out a new health insurance policy, rather than adding children to an existing policy, bear in mind that you may need to serve all waiting periods on the policy before you can start claiming benefits.

This article was co-written by James Hurwood. It was reviewed by our Sub Editor Jacqueline Belesky before it was published, as part of our fact-checking process.

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