Need to know
- Review your health insurance at least once a year to make sure you're getting the best cover and value
- Check which benefits your fund offers children on your policy – these can vary between providers
- Two-parent families often pay the same as couples (so children are effectively insured for free), but single parents are charged extra, so it's worth shopping around
Determining which health insurance policy is right for you depends on which life stage you're at. A policy that suits a young family will probably not be the best option for a pensioner, for example.
If you're a two-parent household with children and you want hospital cover, this article explains what to look for in a health insurance policy.
If you're a single-parent household, you'll find this article useful, but make sure you also check out our dedicated feature on the best health insurance for single-parent families.
On this page:
- The four tiers of health insurance
- What to look for in health insurance for children
- Things to consider once the children leave home
- Five steps to better, cheaper health insurance
- Health insurance terms explained
The four tiers of health insurance
In Australia health insurance policies are categorised into four tiers:
- Basic – very little if any cover in a private hospital
- Bronze – low cover
- Silver – medium cover
- Gold – full or top cover.
In between these main tiers there are also Basic Plus, Bronze Plus and Silver Plus policies that cover at least one service more than the normal Basic, Bronze or Silver policies.
For example, a Silver Plus policy could include cover for an insulin pump or cataract surgery (services usually only covered under Gold policies).
What to look for in health insurance for children
Many health funds offer special benefits for kids. If you're taking out health cover for your kids or switching to a better deal, keep an eye out for these features.
1. No excess or co-payments for children
These funds told us they don't charge an excess or co-payment for children who need to go to hospital on some or all of their family and single-parent policies.
CHOICE tip: Basic, Bronze and Silver policies (with some cover restrictions) often charge an excess for children, so check the fine print before you sign up.
2. Free or discounted extras
Some funds offer free or discounted extras services for children, such as dental check-ups or discounts on glasses. Note, though, that you'll usually need to visit preferred providers to take advantage of these benefits.
3. Extended coverage for older children
As of 2021, the government has increased the age cap for adult children on their parents' policy from 24 to 31. At the same time, the age limit was removed for dependants living with disability (NDIS participants).
Bupa, Medibank, HCF and NIB along with most other funds have increased their age limits. While children and full-time students up to age 31 can often stay on the regular family policy for free, there would usually be an additional cost to keep older dependants and non-students covered – depending on the insurer, this can add up to 30% to your premium and is often called an extended family policy.
Once you need an extended family policy, it's time to carefully consider everyone's health cover needs. If you're on a top cover policy, it could be cheaper to insure your adult dependant on their own low to medium cover policy – especially if you have a family income of $186,000 or higher and don't get the full health insurance rebate. Your adult dependant would be eligible for the rebate as well as a youth discount.
Funds also have different conditions for dependants they allow on family policies. Normally you can't be married or in a de facto relationship, but with some insurers, you also need to live with your parents, be financially dependent, or the insurer sets a cap on how much you can earn.
There are also differences in the definition of a full-time student (who can usually get insured for free), so it's important to check the individual policy for details. For example, Bupa excludes apprentices while Teachers Health includes apprentices, interns and cadets.
It's worth shopping around for a better deal if your health fund tells you that your adult children are no longer covered by your existing policy.
CHOICE tip: If these benefits aren't mentioned when you get a quote, just ask.
Things to consider once the children leave home
Should you downgrade to a couples policy?
As couples mostly pay the same for health insurance as families, there's no real advantage to switching to a couples policy.
However, as you both may have different health needs, especially for extras services such as dental, optometry and physio, it may make sense to switch to different singles policies. Singles policies usually cost half as much as a family or couples policy.
Should you downgrade to cover without pregnancy?
If you're not going to have more children, you could consider downgrading to a policy that doesn't include cover for pregnancy and fertility (such as a Silver Plus policy, as opposed to a Gold policy).
But be careful – many of these Silver Plus policies that don't include cover for pregnancy are more expensive than the best Gold policies. This is because people who don't need pregnancy cover (i.e. later middle-aged and older people) tend to need cover for things such as hip or knee replacements, which are very expensive for insurers, so they price those policies accordingly.
Many Silver Plus policies that don't include pregnancy are more expensive than Gold policies
Even though you might be happy to take out a policy that restricts conditions you think you won't need – for example, pregnancy, fertility treatment and gastric banding – keep in mind that with these kinds of policies, health funds can change and add to the procedures that they exclude or restrict for Bronze Plus or Silver Plus policies without changing the classification of the policy.
So, unless you keep track of all the materials the fund sends you and you regularly check your policy, you might find yourself without cover for something you'll actually need. This means you may actually be better off with a Gold policy that covers everything, as funds are much less likely to add restrictions to those.
Five steps to better, cheaper health insurance
We know getting a handle on this stuff can seem like a chore. It's why our health insurance experts have created a handy five-step action plan to help you through the process of reviewing, comparing and switching your health insurance policy.
Just a few minutes could potentially save you hundreds of dollars per year: one of our CHOICE editors saved herself more than $1800 a year by simply reviewing and switching cover for her young family.
Follow these five easy steps below.
Health insurance terms explained
Excess
An extra amount, such as $750, charged once per hospital stay. It usually applies once (single) or twice (couple and family) per year.
Co-payments
An extra amount, such as $70, that you pay per day while in hospital. It's usually capped per hospital stay or per year.
Preferred providers
Health funds sign up dental practices or optical stores as part of their preferred provider network. Some clinics are even owned by the fund.
Preferred providers may offer a discount to a health fund's members, or the health insurer may pay members higher benefits if they go to preferred providers. For example, instead of a set dollar benefit, the fund may pay a percentage benefit, such as 75% of the bill, which can result in lower out-of-pocket costs for you.
Stock images: Getty, unless otherwise stated.
