Are you too old to keep being covered by your parents’ health insurance? When you’re in your twenties, enjoying life usually means becoming more independent and kick-starting your career. One of the last things on your mind is something like health insurance – but it’s a lot more important than you might think.
Why do young adults need health insurance?
You’ll no longer be covered by your parents’ family policy when you turn 25 years old, or earlier (18 to 21 years old) if you stop full-time study or graduate, get a full-time job, or get married. Check with your parents’ health insurer for details, as all policies differ slightly.
Thanks to several government incentives like the Lifetime Health Cover loading and the Private Health Rebate, your twenties are the prime time to take out a basic level of private health cover.
You will probably have to choose a private health insurance policy of your own, keeping in mind your circumstances change rapidly throughout your twenties as you transition from student or trainee to fully independent adult. So how do you go about choosing something as complex as health insurance?
The table below features a snapshot of hospital & extras policies on Canstar’s database with general dental cover and links to providers’ websites, sorted by Star Rating (lowest-highest) then by provider name (alphabetically). Please note the results are based on a single male aged under 35 in NSW.
Am I still covered by my parents’ health insurance?
It depends how old you are and what the terms and conditions of your parents’ health insurance are. If you are a full-time student and aged 25 or younger, you may still be covered under your parents’ health insurance policy.
Generally, to be covered for health insurance under your parents’ policy, you need to be:
- Not married or in a de facto relationship
- Studying in a full-time approved tertiary course
- Aged 25 years old or younger (note that some funds impose a lower age limit)
- Be at least partially financially dependent on your parents
What if I’m not studying?
If you’re not currently studying, then most funds will boot you off your parents’ policy between the ages of 18 and 21 years old. As the rules can differ between funds, it’s always important to check with your insurer.
I’m almost 25 or finishing my studies – what should I do?
If you are approaching the point where you will no longer be covered under your parents’ health insurance policy, start shopping around for a replacement cover now!
Many funds will 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 conditions, it’s worth avoiding that waiting period headache if you can.
The cost of health insurance for young adults
if you’re still covered by your parent’s policy, then you hopefully won’t be paying for anything. If you decide to pay your own way though and get your own health insurance policy, then the table below shows the average annual premiums for hospital &extras policies for young people.
Bear in mind that ‘young’ in our Star Ratings Methodology refers to anyone under the age of 35.
2017 Health Insurance Premiums – Hospital and Extras Packages
|Young Singles – Female||$2,097||$1,411||$2,105||$2,013||$2,023||$2,181||$1,985|
|Young Singles – Male||$2,097||$1,411||$2,105||$2,013||$2,023||$2,181||$1,985|
|Young Couples – Non Obstetrics||$4,210||$2,827||$4,226||$4,053||$4,080||$4,380||$3,971|
|Young Single Parents – Non Obstetrics||$3,863||$2,589||$3,816||$3,626||$3,774||$4,015||$3,727|
|Young Family – Non Obstetrics||$4,301||$2,880||$4,319||$4,138||$4,155||$4,467||$4,117|
|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.|
Understanding the types of health insurance
It helps to start with a clear understanding of the two levels of coverage – Hospital Cover and Extras Cover (also known as Ancillary Cover).
Why young adults need Hospital Cover
Teenagers and young adults are statistically the most likely age group to end up in hospital. The AIHW reported that 27.5% of people who visited the emergency department in 2015-16 were aged 15-34 years old. With this in mind, cover for ambulance transport services and hospital cover could be considered pretty important.
Hospital cover policies put you ahead of the public system (Medicare) queue if you need to go to a hospital. With hospital cover, you also get to choose what doctor treats you at the particular hospital recommended by your health fund, and you have added flexibility on the timing of your surgery or treatment.
For non-emergency conditions like tonsillitis that puts you out of action for a few weeks, having private cover can mean that tonsil removal happens months or even years earlier than it would in the public system.
Hospital cover is also helpful if you require specialist treatment after, say, a stint in Emergency at a hospital. Medicare may cover you for your initial treatment while admitted, but if you have ongoing specialist treatment such as rehabilitation, you may be out of pocket without health insurance.
Generally, once admitted to a hospital for a procedure, the cost of your treatment is covered by your health fund. This includes intensive care, theatre and accommodation costs, doctors’ fees and other medical costs, such as drugs and dressings, associated with your treatment.
The table below features a snapshot of hospital policies on Canstar’s database with links to providers’ websites, sorted by Star Rating (lowest-highest) then by provider name (alphabetically). Please note the results are based on a single male aged under 35 in NSW.
Should young adults have Extras Cover?
There’s some expensive stuff involved in growing up, but thankfully, a lot of them can be covered under Extras cover health policies. This is the component of health insurance that covers you for out-of-hospital medical care. It generally covers what Medicare doesn’t: dental treatment, glasses, physiotherapy, chiropractic, psychology and podiatry (feet).
With major dental cover, you can get your wisdom teeth removed. With optical cover, you can get help to pay for the reading glasses you need because of all the reading for university. With psychology cover, you can get help to cover the cost of counselling sessions with a psychologist to help you cope with the stress of studies, working and growing up.
If you were unlucky enough to be in an accident, physiotherapy or chiropractic cover could help you pay for your rehabilitation.
Health funds also offer sign-up incentives including gym memberships, health and wellness programs, recipes, health guides, discounts, and more. It’s important to consider what extras policies are more important to you.
All health funds offer a range of extras benefits with differing levels of coverage and different benefit limits on how much you can claim per year. You might want to choose a policy where you have a lower limit for chiro and physio but a higher limit on dental or optical. Always check the small print with each insurer.
Should I purchase policies separately or as a bundle?
Hospital Cover and Extras Cover can be purchased separately, but the majority of Australians opt for two-in-one Hospital and Extras packaged cover. The main reason for this is that it offers a wider range of coverage, in a world where you never know what’s going to happen next.
Of course, everyone’s personal situation is different and what works for one may not work for another. It is simply a case of honing in on what you believe is of value to you now and down the track.
How do I know what health insurance to get?
If you’re a young person or couple, there are a few factors that you will need to consider when looking at health insurance.
Probably the most important criterion for your insurance premium is also the most obvious: Can you afford it?
Depending on your situation, you may be able to afford a very different level of health insurance cover. If you’re fresh out of university and not far into your first graduate job, you’ll probably only go for the most basic Hospital cover. On the other hand, if you have been working in your field for several years, your earnings may be enough for you to take out a more comprehensive Hospital and Extras packaged plan.
Keep in mind that down the track, government policies like the Lifetime Health Cover loading and the Private Health Rebate are designed to encourage you to have private health insurance if you can afford it. It can be more expensive later on in your 30s and 40s if you decide not to have private health insurance now!
How active your lifestyle is
How active a person you are is another big factor – after all, the more strain your body goes through, the more likely you are to get sick or injured.
If you work in a physically demanding job or you work outside, or you play a lot of sports and love to go adventuring, you may benefit from having physio and chiropractic cover.
If you work in a typical office environment and you’re a bit of a couch potato at home, you may simply need a bit of optical cover for glasses or a bit of physio cover for RSI after working at the computer all day.
Do keep in mind, though, that no matter what lifestyle you lead, you never know what might happen!
We may not like being labelled as ‘single’ or ‘taken’ but it does affect your health insurance needs. If you and your significant other are thinking about starting a family, then it’s important you plan for that in your health cover – obstetrics is a good idea, as is a decent level of hospital cover.
So – if you’re single and living life as it comes, you could consider looking for Singles Cover. If you are in a committed relationship and thinking about the future, you could look for Couples Cover.