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.

If you’re expanding your family – perhaps having a baby, adopting a child, or blending families – you may be wondering how this will impact your health insurance premiums. The good news is that if you stay on the same policy, adding a child to that policy may not affect your premiums by too much. However, if you need to upgrade your cover to a different type of policy or want to include specific types of cover (such as obstetrics), this is likely to increase the overall cost.

Here’s an overview of how health insurance for children works, how much it could cost, 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, or single parent, health insurance policy.

• A family health insurance policy will generally provide cover for you, your partner if you have one, and your children (depending on the fund, it can be up to and including the age of 31).
• 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.
• If you already have a health insurance policy, you may want to contact your health fund for details on how to add children to your health insurance policy.

It’s important to know that if you are having a baby, and you have obstetrics cover but are on a single (or couple) policy, your baby’s care in a private hospital will not be covered by your policy. So, if your baby needs to be admitted to the private hospital for extra care, you’ll have to pay those costs.

How long can children stay on their family’s health insurance policy?

Children are not covered if they marry or enter a de facto relationship and after they turn a certain age (ranging from 21 to their 32nd birthday, depending on the health fund). Keep in mind, not all family health policies allow for this and you may need to pay a higher premium in order to keep your dependants on the family policy. Check the health fund’s rules.

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

Whether or not it will cost you more to add a child to your health insurance policy depends on a few things, such as if you have to upgrade to a family policy or single-parent policy, and the rules of your health fund. For example, if you:

• Are already on a family policy: In this scenario, adding a child to your existing policy is unlikely to cost more in premiums.
  • However, if you are planning on getting pregnant and need to add obstetrics (pregnancy) cover, this will cost more as you will typically have to upgrade your level of cover to a higher tier. Keep in mind there are waiting periods for pregnancy cover, usually 12 months.
  • There are usually rules around the timeframe in which children can be added after they are born, too, or the child may be subject to waiting periods and other conditions.
  • If you are, for example, adopting a child or adding an older child to a policy, it may not cost any extra but it’s a good idea to check with your fund.
• Need to upgrade to a family policy (without pregnancy cover): This is likely to cost more. According to Canstar Research, for hospital and extras policies, the cost difference on average between couple and family policies is $240 annually, or around $20 per month.
• Need to upgrade to a family policy (with pregnancy cover): This is likely to increase costs of premiums. Canstar Research found that the cost difference for moving from a couple to family policy could be $318 per year on average, or around $27 a month.

Although, keep in mind that the amount it could increase will vary depending on the insurance provider and the level of coverage you choose.

National average annual hospital & extras premiums for couples and families

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

Source: Prepared on 28/06/2023. Based on hospital & extras insurance policies on Canstar’s database. OSHC, vistor and cooporate policies, as well as policies from restricted funds, are excluded. The Australian Government Private Health Insurance Rebate, Base Tier for under 65s has been applied to premiums. Average premiums baseed on state averages weighted by proportion of insured population (APRA Quarterly Private Health Insurance).

Compare family health insurance policies

What are the benefits of health insurance for kids and dependants?

Kids’ medical expenses can be costly, particularly when the unexpected happens. So having private health insurance cover for your kids or dependants could potentially ease the financial stress of medical appointments.

Other potential benefits to having private hospital and extras cover for your kids, include:

• Having a private room: if available, staying in a private room during a hospital stay can have hidden perks, such as more space for the family when visiting and you may even be able to request for an extra bed during your kid’s stay.
• Choosing your doctor: with private hospital cover, you’ll also be able to choose your child’s doctor and have more say in what type of treatment your child will receive.
• Avoiding public wait lists: by having private health cover, you can avoid potentially long public waiting lists if your child needs elective surgery.
• Dental cover: majority of extras policies will have general dental included, which will help subsidise the cost of maintaining the often complex nature of children’s dental health. But keep in mind, you may need to take out a higher level of coverage if your kid needs major dental or braces (orthodontics).
• Cover for Sports injury: sports injuries can be fairly common for children, so it could be handy to be covered for physiotherapy or even podiatry.
• Psychology: mental health support can be incredibly important for growing kids, but not all extras policies may cover psychology, so it’s important to read through a policy’s product disclosure statement carefully.

Medical care can be expensive and easily add up, particularly with growing kids. So having private health insurance for your kids can help to reduce your out-of-pocket costs. But limits and exclusions may apply, so it’s always important to carefully read through a policy’s product disclosure statement before you take out insurance.

Explore further→ How long can I stay on my parents’ private health policy?

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 more children.

There are four main tiers of hospital cover available in Australia: 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 for in the future. Some common considerations for families may include:

• Cover for pregnancy and related services.
• Cover for general dental, major dental or orthodontics.
• Your excess. As kids may be more likely to hurt themselves than adults, a lower excess could be appropriate. Having a higher excess may lower your premium, but potentially contribute to higher out-of-pocket expenses. Bear in mind a lower excess could mean paying higher premiums.
• Any waiting periods that apply.
• Any incentives or special offers available.

If you require private insurance cover for pregnancy and birth, you can either take out a Gold-tier hospital policy (which is the only tier that has pregnancy and birth as a minimum requirement), or another hospital tier that can include pregnancy and birth as an addition for the policy. 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 it’s always worth taking your own circumstances 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. For example, if you’re pregnant, 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 yourself. However, if you are giving birth in a private hospital and want to ensure that your baby is covered when it’s born, you’ll need to add it to your insurance (within the timeframe required by your health fund), and this could require you moving up to a family policy. It’s a wise idea to crunch the numbers and compare the costs before changing your insurance.

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 hospitals and extras policies in different states and territories across Australia.

Average Annual Hospital & Extras Premiums for Families by State

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

Source: Prepared on 28/06/2023. Based on hospital & extras insurance policies on Canstar’s database. OSHC, visitor and coporate policies from restricted funds, are excluded. The Australian Government Private Health Insurance Rebate, Base Tier for under 65s has been applied to premiums.

Compare family health insurance policies

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, including:

1. 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 such as dental checkups, x-rays, etc.
2. For health insurance purposes, a ‘dependent child’ is a person under the age of 18 years who does not have a partner, as defined in the Private Health Insurance Act 2007. However, health funds can extend that age limit for dependants to 31 years of age, provided the dependant remains unmarried and is not in a de facto relationship.
3. The change in premiums may not be as high as you might expect when changing from a couples health insurance to a family health insurance. So, if your premiums may change when you add a child to your policy, you may want to review your policy closely and consider your options.
4. 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.

If you’re planning on having a baby, check that your policy provides cover for pregnancy if you want to use relevant private hospital and/or medical services, non-medical and allied health services outside a hospital as part of your care. According to the Commonwealth Ombudsman, all health funds have a 12-month waiting period on obstetric services. So if you’re wanting private health care during and after your pregnancy, you’ll need to make sure your policy provides this level of cover around three months or more before you (or your partner) conceive.

This article was originally co-written by James Hurwood.

Cover image source: BonNontawat/Shutterstock.com