Leaving your parents’ health insurance in March?

Richard Laycock 23 March 2017

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What you should be looking for in a your own health insurance policy.

If you've recently graduated from your full-time studies it means you've got one more adulting task to add to your ever-growing list: getting private health insurance.

Generally, you'll be forced off your parents' health insurance once you've turned 25, entered full-time employment, graduated from full-time studies or gotten married. No matter which category you fall into, you're probably asking yourself one pertinent question: do I need private health insurance?

That can be a hard question to answer, especially when you're young. Most young people don't see hospital insurance as important as they are generally fit and healthy and there is no incentive forcing them to get cover such as the Lifetime Health Cover (LHC) loading for those over 30.

While that is all well and good, young people are more likely to be admitted to hospital due to injuries or accidents than people from any other stage of life. According to RT Health, those under 30 are more likely to lodge a claim for unplanned medical treatment than older people.

So you have a decision to make, private or public hospital. There are pros and cons to either side of the argument, the main ones being cost vs choice. If you don't want to pay for hospital cover until you have to, then going public may be your best option. If you want to avoid waiting lists and choose your own doctor, then private hospital cover might be for you.

If you decide that you don't need private hospital cover, you may still want cover for incidentals like dental or optical. So if you want to offset how much you spend on various extras, you may want to look for a fund that covers a high percentage for the extras you claim most. Below is how much the funds in our panel covered for selected extras between 2011 and 2015, according to the Private Health Insurance Ombudsman State of Health Insurance.

FundDentalOpticalNatural therapies
Australian Unity47%66%48%
BUPA51%52%38%
CBHS (Restricted)50%53%45%
GMHBA50%60%39%
HCF55%53%35%
Health.com.au*57%48%65%
HIF50%47%27%
Medibank50%60%51%
NIB56%55%54%
Teachers Health (Restricted)54%50%49%
Transport67%58%43%

* Data only available for 2013-15

When choosing a health fund, it's important to see how it has performed in recent years. While health insurance premiums may only be going up by an industry weighted average of 4.84% in 2017, you should check how much the fund you're planning to go with has raised its premiums over the last few years.

You should also be on the lookout for health funds offering sign-up incentives. These can range from premium waivers to gift cards. You may also be able to find a fund that will offer you a discount just for paying your premiums via direct debit.

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