Health insurance for young adults

Take advantage of a youth discount with health insurance for young people.

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Like most Australians, you'll probably need to take out health insurance at some point in your life. But what you may not know is that you qualify for a discount of up to 10% if you take out hospital cover between the ages of 18 and 29. So rather than put it off, it's worth locking in to a cheap policy now to avoid the lifetime health cover loading.

Why should young people consider health insurance?

If it's your first time thinking about buying health insurance, here's why it may be worth getting.

  • Discounts for young people. Thanks to a government incentive, you can qualify for a discount of up to 10% if you take out hospital cover before you turn 29. The younger you are, the larger the discount.
  • Incentives. Keep an eye out for things like gym discounts and money off cinema tickets and shopping. Almost all health insurance brands provide these kinds of perks when you sign up which could save you heaps if you like to keep fit or shop.
  • It's cheap. If you're young and healthy with no major medical concerns, you probably don't need a top level policy. Getting a policy is generally very affordable and means you don't need to worry about how to pay for expensive treatment if something does happen.
  • Avoid lifetime health cover loading. A 2% loading applies to you every year you don't have private hospital cover after you turn 31. If you don't take out cover before then, your health insurance costs will start to rise.
  • Your parents' policy won't cover you anymore. When you turn 25, you usually won't be covered by your parents' family health insurance policy anymore. This can end even earlier if you get a full-time job, marry or graduate. If you want to continue receiving the same care as before, consider getting in now when policies tend to be cheaper.
  • Get access to extras. Extras is the out of hospital care like physio, dental and optical that isn't covered at all by Medicare. If you want these services without breaking the bank, you need to consider getting health insurance with extras.

When am I no longer covered by my parents' health insurance?

There are a few different situations where you need to leave your family's policy. These can include:

  • When you turn 25. This is usually when you're no longer allowed to be listed as a dependant on your parents' health insurance policy.
  • When you get a full-time job. Some insurers won't consider you a dependant anymore when you get a permanent full-time job.
  • When you graduate. If you go to uni or college, you can often stay on your family's policy until you graduate.
  • When you get married. Most insurers outline that in order to be considered dependant, you can't be married.

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Hospital vs extras: Do I need one or both?

Healthcare can be broken into two categories in Australia: hospital and extras. Hospital cover can help pay for treatments that require you to go to hospital, like knee surgery or cancer treatment. Extras takes care of all the services that can be done out of hospital, like dental, physio and prescription glasses. You may want cover for both, or only one of them – it's up to you. To help you decide, here's some of their perks.

Hospital

    • More freedom. You get to choose your own doctor and you can get a private bed in a private room.
    • Get treatment quickly. Waiting times for treatments are usually much shorter.
    • Care beyond the basics provided by Medicare. It can get you cover for specialist treatment like rehabilitation.
    • No unexpected bills. Your health fund will tell you exactly how much they'll pay towards your treatment. In most cases, it'll mean you'll have no or minimum out of pocket expenses for services that you're covered for.
  • Hospital trips are more common than you think. 25 to 34 years olds are the most common 10-year age group to need to go to the emergency department, according to the Emergency Department Care Report 2015-2016.
  • Avoid Lifetime Health Cover (LHC) loading. By taking out hospital cover before your 31st birthday, you can avoid paying extra for cover thanks to the LHC scheme.

Extras

    • Access to care Medicare doesn't cover. Medicare doesn't cover extras services so unless you want to pay hundreds of dollars for treatment, you need extras health insurance.
    • Out of hospital care. It can pay for dental treatment, glasses, physiotherapy, chiro and much more.
    • Mental health support. It can also cover you for counselling sessions with a psychologist if you need to talk to someone.
  • There's usually no lock-in contract. The beauty of extras cover is that you can usually cancel and you won't be charged a cancellation fee.
  • Access to member discounts. Most policies come with perks, like gym membership subsidies, to help you keep fit and healthy, and save both you and your provider money.

Pros and cons of health insurance for young people

Still not sure if health insurance is worth it for young people? Weighing up the pros and cons can help.

Pros

  • It's usually cheap for young people and you get a government discount.
  • It's peace of mind knowing that if something unexpected does happen, you won't be seriously out of pocket or have to rely on your folks to pay your fees for you.
  • You'll probably want private health insurance in the future, so why put it off and lose out on cheaper prices?
  • Enjoy shorter waiting times and access to the doctor and care you want.

Cons

  • Medicare covers hospital care.
  • You might not need it.
  • It's an added expense.

How to choose the right health insurance policy

Everyone is looking for different things, but luckily with health insurance, choosing is easy. There are four different types of health insurance tiers to choose from: Basic, Bronze, Silver and Gold. Each tier has to cover a specific number of services; for example, all Bronze policies must cover the same 18 specific clinical categories. Once you know what is covered by each tier, it makes it much easier to focus on looking at other factors like the price, offers and incentives like gym memberships. You'll also find there are "plus" tiers (e.g. Bronze plus) which means that the provider is offering some extra benefits.

There are 38 clinical categories in total. The table below breaks down what you'll be covered for with each tier.

Clinical CategoryBasicBronzeSilverGold
RehabilitationRRR
Hospital psychiatric servicesRRR
Palliative careRRR
Brain and nervous system
Eye (not cataracts)
Ear, nose and throat
Tonsils, adenoids and grommets
Bone, joint and muscle
Joint reconstructions
Kidney and bladder
Male reproductive system
Digestive system
Hernia and appendix
Gastrointestinal endoscopy
Gynaecology
Miscarriage and termination of pregnancy
Chemotherapy, radiotherapy and immunotherapy for cancer
Pain management
Skin
Breast surgery (medically necessary)
Diabetes management (excluding insulin pumps)
Heart and vascular system
Lung and chest
Blood
Back, neck and spine
Plastic and reconstructive surgery (medically necessary)
Dental surgery
Podiatric surgery (provided by a registered podiatric surgeon)
Implantation of hearing devices
Cataracts
Joint replacements
Dialysis for chronic kidney failure
Pregnancy and birth
Assisted reproductive services
Weight loss surgery
Insulin pumps
Pain management with a device
Sleep studies

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