Get a better understanding of the specific health insurance needs for new parents, single parents and established families.
Whether you are looking to start a family or already have some toddlers or teens, there's a lot to consider when comparing health fund options. This article discusses topics from how maternity services are covered to how government penalties and rebates work.
Compare family health insurance options from 30+ Australian health funds
Hospital cover can be used to pay benefits towards maternity services, obstetrics and other related costs. However, there are several key points you should know about private health insurance and pregnancy:
- Cover is expensive. Pregnancy and related services are only fully covered by the highest-level hospital policies. Some mid-range policies may partially cover you for pregnancy as a private patient in a public hospital.
- Don’t wait until you’re pregnant. Many health funds require you to serve a waiting period of 12 months before you can claim for pregnancy. If you’re already due when you purchase a policy, it may be too late to get the cover you need.
- Out-of-hospital services. Hospital policies only cover the costs related to hospital admissions for childbirth. They don't cover expenses incurred outside the hospital, such as GP visits and some scans and tests.
- Take out a family policy. To make sure your new baby receives the same health insurance cover as you, make sure to add them to your family policy.
What about Medicare?
You can get cover for many of the costs associated with pregnancy in a public hospital. However, only health insurance can cover unexpected costs, give you access to a private room in a private hospital, and allow you to choose your own hospital, obstetrician and specialists.
Your children can be covered under your policy until they are considered adults by your health fund. While the rules around dependants vary between funds, there are three main classifications that are typically used:
- Student dependant. A single person aged 21 to 25 who is studying full time can be covered by a family policy.
- Adult dependant. A single person aged 21 to 25 who is not studying full time may be covered for an additional fee.
- Independent adult. A single person aged over 25 can no longer be covered by a family policy and needs to take out their own cover. This can often be done without serving an additional waiting period if they choose the same fund.
Dependant rules by health fund
|ACA Health Benefits Fund|
|ahm Health Insurance|
|Australian Unity Health|
|CBHS Health Fund|
|CDH Benefits Fund|
|Doctors Health Fund|
|Frank Health Insurance|
|Health Care Insurance|
|Health Insurance Fund of Australia|
|Latrobe Health Services|
|Mildura Health Fund|
|National Health Benefits Australia (onemedifund)|
|NIB Health Funds|
|Peoplecare Health Insurance|
|Phoenix Health Fund|
|Queensland Country Health Fund|
|Railway and Transport Health Fund|
|Reserve Bank Health Society|
|Teachers Health Fund|
Just welcomed your first bundle of joy?
- Hospital cover. While top cover may be too expensive, not to mention unnecessary, at this stage, you can opt for a mid-range policy to get private hospital accommodation and avoid waiting lists. If cost is the biggest issue, a basic policy might be a better option, but make sure that emergency ambulance transport and treatment for accidents are covered.
- Extras cover. This affordable health insurance is a must for young families as it covers you for Medicare-excluded services that children commonly need such as dental and optical. In addition, the healthy lifestyle benefits offered by many extras policies, which include services such as nutrition consultations, may be very attractive to new parents.
Considerations for new parents
- Health insurance deals. To save money and get maximum value from your cover, keep an eye out for promotions offered by health funds. These are especially common around March and May due to health insurance premium adjustments, which are made in April and at the end of the financial year in June.
- Government rebate. The government provides a financial incentive for taking out private health in the form of a rebate, the size of which is dependent on your family income.
- Lifetime Health Cover loading. If you and your partner are approaching 31 years of age, it's in your interest to take out private health cover now to avoid a 2% increase to your premiums for every year you don't have cover.
Expanding your family?
- Hospital cover. If you're trying for another child and want full pregnancy cover, then purchasing or upgrading to a top policy might be your only option. Alternatively, you can take out a cheaper mid-range policy for partial cover. Just make sure whichever policy you choose provides ample protection for your other children as well.
- Extras cover. The ideal extras services depend largely on the ages of your children. Dental is always useful, although a more costly extras policy is required for major dental or orthodontic benefits. Older children who are starting to play sport can benefit from physical therapies, and optometry is worthwhile for anyone whose vision may be deteriorating.
Considerations for growing families
- Cover for stepchildren. Family policies allow you to cover children under the age of 21. This includes stepchildren, adopted children and permanent foster children.
- No-gap dental and optical. A number of health funds allow you to access free preventative dental procedures, optical items such as frames and lenses, and eye tests. This is always beneficial but even more so if you have several children who require these services.
- Medicare levy surcharge. If your family income is more than $180,000 p.a., you pay between 1% and 1.5% more tax than everyone else if you don’t have private hospital cover.
Children becoming adults?
- Hospital cover. Until they leave home and take out their own health insurance, it is wise to keep your children on your family policy. What you can do is begin lowering your premium costs by dropping cover for services you may not need anymore, such as pregnancy if no more children are planned.
- Extras cover. The kind of extras services your children need change as they become young adults. Orthodontics may be less important as the braces come off, while alternative therapies and psychology benefits may become of use. Your children may also find healthy lifestyle benefits attractive, as they allow you to claim for gym membership and fitness classes.
Considerations for families with older children
- Remember to switch. Once your children become ineligible for cover under your family policy, be sure to switch to a couples policy, which is less expensive.
- Government rebate. You still receive financial assistance with your private health cover in the form of the government rebate. The threshold rises by $1,500 per child.
- Medicare levy surcharge. You won't be penalised if your adult children remain at home, as their income is not included in your overall family income.
Raising children on your own?
- Hospital cover. This insurance remains important to single parents, allowing you to choose your own doctor for you and your child, avoid waiting lists, and enjoy private hospital accommodation if it is covered by your policy. Remember to drop any services you don't need, to keep your premium costs as low as possible.
- Extras cover. Be sure to maintain only the level of cover you need and drop any unnecessary services. Some health funds allow you to build your own extras policy and add only the services you want, so take your time to shop around and get the best* policy for your family.
Considerations for single parents
- Discounts for single parents. Health funds are now able to offer single parents reduced premiums on cover. The discount amount is decided by the fund, so compare policies to make sure you're getting the largest reduction possible.
- Getting divorced. If you’re getting divorced remember to keep your health insurance policy in place. If you allow your cover to lapse you may need to serve waiting periods again when you reapply.
- Government penalties and incentives. As a single parent who is possibly on a single income, maximising the value of your cover is critical. Make sure you take advantage of the government rebate and avoid the Medicare levy surcharge and Lifetime Health Cover loading so you don't pay any more than you have to.
- Review your cover. As your children grow up and your circumstances change, so do your health insurance needs. Reviewing your policy each year ensures that you're being covered for the things that matter most to your family.
- Avoid combined limits. When considering an extras policy, try and find one that offers individual benefit limits for each service rather than overall combined limits. Your family may exceed individual limits if they aren't high enough.
- Don’t be afraid to switch. If you find a better policy offered by a different health fund then consider changing. Your benefits and any served waiting periods must be honoured by your new fund.
- Split your cover. If one health fund has your ideal hospital policy, and another has the best* extras policy, there is no law that says you can’t have a separate policy for each.
- Get full ambulance cover. Look for policies that offer full ambulance cover, which pays benefits towards ambulance fees for non-life threatening journeys as well as emergency transport.
- Private health insurance rebate. This was introduced by the Australian government to help more people access health insurance. The rebate amount varies depending on your combined family income and your age. It can be claimed either as a premium reduction through your fund or as part of your tax return.
- Medicare levy surcharge (MLS). The Australian government introduced the MLS to encourage more people to take out health insurance and reduce the strain on the public health system. If you don't have cover you pay an additional surcharge on top of the standard 2% Medicare levy once your combined family income reaches certain thresholds.
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