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You can stay on your parents’ health policy until you’re 31 – if your fund plays ball


Aussies can stay on their parents' policy until they're 31 and health funds are welcoming the changes.

Australians will soon be able to stay on their parents' policy until they're 31, thanks to legislation that has just passed.

The change – originally set to come into effect on 1 April 2021 – passed at both a parliament and senate level on 22 June 2021 and will allow health funds to increase the age of dependents from 24 to 31.

An opportunity for young Australians to save

It means young adults can stay on their parents' private health insurance policy for longer and won't have to fork out for a policy themselves.

It's hoped the decision will help alleviate the financial strain on young adults, particularly after a difficult 18 months, which saw high levels of youth unemployment.

The other major change will see age limits scrapped for dependents with a disability. This means they'll be able to stay on their family policy indefinitely.

Will health funds play ball?

While the government legislation is good news for thousands of young adults, it's not mandatory, so there's no guarantee all health funds will implement the changes.

However, Matthew Koce, CEO of Members Health Fund Alliance said, "The reforms are welcome and have been embraced by health insurers."

Members Health Fund Alliance is the peak industry body for not-for-profit and member-owned group health insurance funds. This includes some of Australia's biggest insurers, such as HCF and HIF.

"These reforms are something not-for-profit and member-owned insurers have been advocating for over many years and it will be a welcome relief for many Australian families," Koce said.

"With a diverse range of over 30 health insurers competing in the market, we expect the reforms to be widely adopted and encourage consumers to shop around to find the health insurance policy and fund that best meets their personal circumstances."

Will for-profit health funds implement the changes?

It's easy to see why not-for-profit funds would adopt the changes since they claim to be more concerned with giving back to their members than with turning a profit. But what about for-profit private health funds?

According to Dr Rachel David, the CEO of Private Healthcare Australia (PHA) – the private health insurance industry's peak representative body in Australia – many of the funds they represent are also willing to get on board with the changes.

"PHA member funds have indicated they will adopt the changes but are awaiting detail on the measure from the Department of Health," Dr David said.

PHA currently has 23 registered health funds throughout Australia and collectively represents 97% of people covered by private health insurance. As well as several not-for-profits, it also represents larger health funds such as Bupa, Medibank and nib.

"The dependents policy and youth discount (LHC) are both positive measures to encourage young Australians to maintain and take up private health insurance, but as the recent IGR (Intergenerational Report) demonstrated, more must be done in future to overcome the demographic challenge Australia is facing", David added.

When will funds implement the changes?

Unfortunately, anyone turning 25 before the end of 2021 might just miss out on the changes being introduced.

Koce said, "the new government regulations are still being bedded down and it is anticipated that new products for dependents will be on offer by the end of the year."

What to do if you're still on your parents' policy

Generally, you'll be forced off your parents' health insurance once you've turned 25, have entered full-time employment or graduated from full-time studies.

If you're still a dependent on your parents' policy, don't jump ship just yet. Keep an eye on health funds introducing the changes and you might be able to avoid taking out your own policy.

For those unable to stay on their parents' policy any longer, you can compare health insurance policies here. Hospital cover starts from around $17 per week and can cover you for accidents and ambulances.

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