Covering Your Loved Ones - A Guide to Private Health Insurance for Dependents

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Tammy George

mother and daughter covered by family policy

There is nothing more important than your child’s health. Most parents will do whatever it takes to ensure their child has everything possible to get started in life. Healthy children grow into healthy adults who can enjoy a long and rewarding life. Even when children become adults, parents often want their children to continue enjoying private health insurance benefits.    

What is a Dependent in Terms of Health Insurance?

A dependent is a person who relies on a health insurance policy holder and includes children, stepchildren, legally adopted children, or children for whom the primary policyholder is their legal guardian. 

Some health funds have different age limits, and at HIF, a child can stay on the family’s health insurance policy until their 21st birthday. If the child is a full-time student at a recognised educational facility, they continue to be recognised as a dependent until their 31st birthday. Dependents aren’t required to live in the family home, but they are no longer considered dependent if they marry or live in a de-facto relationship. 

Age Limit for Dependents

Australian dependent age limits remained unchanged for many years until 2022. The Private Health Insurance Legislation Amendment (Age of Dependants) Bill 2021 was introduced to improve access to private health insurance for younger people dependent on their parents. The Bill allows insurers to cover people as dependents until the age of 31. Changes under the Bill are voluntary, not mandatory for health insurance funds to follow. 

Before October 2022, the age limit for studying dependents to stay on the family health insurance policy was 24, but the Government increased the maximum age to 31. Not all health funds increased their age limit to 31, some decided on a younger age limit.

Some insurers offer an extended family policy, which allows parents to keep their non-student adult children on their policy. However, the cost can be as much as an additional 30% of the total cost of the family premium. For families with a top hospital cover that doesn't qualify for full health insurance rebates, it may be cheaper to have a separate policy for the adult child on a low to medium-cover policy.  

At the same time as it changed the maximum dependent age limit, the Government removed the age limit for dependents living with disability (NDIS participants).   

There is no set age limit for dependents on their parent’s health insurance policy. Insurers choose the age at which dependents are still covered. Some health insurers have different ages for students and non-students.

mother and son looking at getting myself and kids health coverage

Benefits of Private Health Insurance for Young Adults

Being able to claim part of the cost of seeing the dentist or physio encourages young adults to seek healthcare. If young adults over the age of 18 can’t claim on the family policy, they may be less likely to make an appointment. The out-of-pocket expenses can be steep, and paying the full cost of appointments on a starting salary can be cost-prohibitive. 

Many young adults don’t value and/or prioritize their health as much as we all should, so attending a medical appointment that will cost them a small fortune may be well down their priority list. Developing good healthcare habits before 21 years old increases the likelihood of continuing to take good care of yourself. Many young people don’t earn enough to pay the Medicare surcharge, so that incentive to take up hospital coverage isn’t relevant.       

Parents enjoy the peace of mind of knowing their child won’t have to rely on a public hospital waiting list should they have a serious health condition. Hence, allowing young adults to continue claiming on the family policy until the age of 21 (or beyond for students) increases the chances of taking up their health insurance policy at the age of 21 compared to when they were 18. 

How to Choose the Right Policy

Just as your family grows and changes, so too do healthcare needs. You may have three or four adults and possibly younger children claiming on one family policy. The policy also needs to meet the needs of a variety of ages, from young children to young adults and middle-aged or older parents. The family policy you had 10 years ago may not be the right policy for your family today, which is where a review plays an important role. 

As an older parent, you might want to check that your policy covers you for joint replacements, cataract surgery, heart and vascular systems, chemotherapy, podiatric, and dental surgery. You’re more likely to need cover for these procedures later in life than 10 years ago. 

If a review of your current hospital and extras policy has revealed that you need to change policies, you can get a quote online or call the HIF call centre.   

If you're a single parent with dependent children, you won’t need a family policy. On the HIF website, when requesting an online quote, choose the option for ‘Myself & my kids’ rather than ‘Our family’.  

Additional Support & Services for Dependents

If you have a dependent adult on your policy who needs to see the physio or chiro regularly, you may need to check that the annual limit is adequate. The annual limit is the maximum benefits payable to a member in a year commencing January 1st. Depending on your level of coverage, there will be an annual limit per person and an annual limit per policy for extras. The personal and policy limits increase with each level of cover. Any unused personal limit can’t be transferred to another family member who has exhausted their annual limit. After a review, you might decide it’s worth increasing your level of coverage so you can all benefit from a higher limit.

Some hospital cover policies allow people to choose an excess option to reduce the cost of the premium. For HIF’s Silver Hospital family policies, there is a per-person excess to a maximum per calendar year. If you anticipate multiple family members having a hospital procedure in one year, you can choose a low excess and higher premium.   
Consider what services your dependent child needs now and may need until they reach their age limit. For some dependents, their biggest need is psychiatric care, while for others, it’s being able to treat multiple sports injuries.

Some families with one or more adult dependent daughters like having the peace of mind of knowing their insurance policy covers them for maternity, miscarriage, and pregnancy termination. 

parents with pregnant daughter having peace of mind she has private health cover

If your child is an NDIS participant, they may stay on your policy until it ceases to exist, so the policy needs to meet their needs well into the future if they don’t marry or live in a de facto relationship. 

Health insurance for dependents is more generous than a few years ago. Use the time your adult child has coverage by your family policy to encourage them to look after their health. Establishing good health habits as a young adult will pay dividends for their lifetime. 

Tammy George

Please note: Tammy's blog is general advice only. For further information on this topic please consult your healthcare professional.

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