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Young Adults Health Insurance

Name: Young Adults Health Insurance
Creator: Savvy
Published: 2023-03-02T14:32:26+10:30

Compare health insurance for young adults here with Savvy and get quotes from a panel of trusted providers online.

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Written by , updated on July 11th, 2023

We’ve partnered with Compare Club to bring you a range of health insurance policies to help you compare them side by side.

The Australian Government offers several incentives to young adults to buy private health insurance before the age of 31. You can not only save money on your premiums but also avoid paying other expensive taxes if you get health insurance in your twenties.

Savvy can help you find and compare a range of quotes for health insurance from a panel of some of Australia’s leading insurers. We make the process of buying health insurance as a young adult simple. Just by answering a few basic questions about the cover you’re after, you could have your health insurance needs sorted out before you know it. Start the process of getting your cover with Savvy today.

What health insurance options are there for young adults in Australia?

There are many options available for young adults looking at private health insurance in Australia. Broadly speaking, your choices come down to:

Staying on your parents’ health policy for as long as you can (which may not be the cheapest option long-term, as it rules out age-related discounts and may require you to pay the Medicare Levy Surcharge in certain cases)

Choosing not to take out private health insurance until you’re aged 30 or more (which may result in you having to pay the MLS or Lifetime Health Cover loading)

Choosing to have your own health insurance as soon as you’re earning a suitable income (which may mean you’re eligible for an age-related discount)

Choosing to have basic private hospital insurance when you’re younger and increasing your cover as you mature

The two different types of health insurance available in Australia are:

Hospital cover – which can assist with the cost of medical treatment while you’re an inpatient
Extras cover – which can assist with the cost of treatments you receive as an outpatient, particularly those treatments which aren't covered by Medicare. Examples include glasses and contact lenses, dental, physio and chiropractic treatments

The cheapest private health insurance option for your circumstances will depend on:

your age
your work or study status
your health status
your income level
your family status
where in Australia you live

As you can see from this long list of variables, there is no ‘one size fits all’ private health insurance solution which suits all young Australians. However, Savvy can help you sort through the maze of factors and help you come through the other side with a clear understanding of what type of policy might be the best one for you among our partner’s panel of insurers.

We can help you compare appropriate health insurance policies side-by-side so you can clearly see what's on offer, with free, no-obligation quotes so you can consider a range of policies in one place. There’s also an option to ask for a call-back, so a health insurance specialist can talk you through the different offers available. Start comparing through Savvy today!

How long can I stay on my parents’ private health insurance as a young adult?

It’s important to be aware of how long you can continue to be included under your parents’ private health insurance policy. Most children can be included under their parents’ family health cover either free of charge, or for very little extra, depending on the age and status (eg student.) The qualification requirements can vary between insurers when it comes to dependents, but can be as follows:

Some health funds cease coverage for dependents on a family policy at age 21, while others may extend this to 25 or even as high as 31 in certain situations
To continue to be covered on a family health policy beyond 21, young adult dependents often have to continue to be in full-time education and must not be married or have dependents of their own
Some (but not all) health funds also impose income-test limits for a dependent to be included under a family policy. For example, once a dependent is earning more than $90,000 p.a., they're required to take out their own health insurance policy

What age-related discounts are available on health insurance for young adults?

If you're no longer eligible to be included under your parents’ family health insurance policy, or you’ve left home and are now living independently, the Australian Government has enabled age-related discounts to encourage young people to get private health insurance at a younger age. This discount is:

A 2% discount on the cost of a hospital insurance policy for each year you are aged under 30
The discount is capped at a maximum of 10% for 18 to 25-year-olds
The discount only applies to hospital cover policies, not extras policies
The discount may apply until you reach the age of 41, after which it’s reduced by 2% each year until it hits 0%

While discounts are widely available, they may not be available from all insurers on all policies.

What other benefits are there to getting health insurance as a young adult?

The Australian Government uses a ‘carrot and stick’ approach to encourage young Australians to take out health insurance. Younger Australians are encouraged to buy health insurance with the offer of age-related discounts on the price of a policy for those aged under 31.

However, there is also a punitive aspect to this policy, which means that Aussies who don’t have private health insurance, and who earn higher incomes, have to pay an additional tax to assist with the cost of Medicare. In addition, if they do take out health insurance later in life, they may also have to pay more for their health cover the longer they leave it to buy their insurance.

Avoid the Medicare Levy Surcharge

If you work in Australia, your employer will almost certainly take out an additional 2% from your wages each payday (on top of the income tax you have to pay) to cover the Medicare Levy. This is a 2% tax all Aussies pay which helps fund Medicare.

However, if you don’t have ‘adequate’ private health insurance and earn over $90,000 p.a. as a single, you may have to pay more health insurance tax. This additional tax is called the Medicare Levy Surcharge (MLS) and applies to those who are uninsured and earning over $90,000 p.a. as a single or $180,000 as a couple or family.

The MLS is an additional tax of between 1% and 1.5% of your income, depending on your taxable income that financial year. You may still have to pay the MLS if you are a dependent, aged over 21, who is not a full-time student, and you earn over the MLS threshold of $90,000 p.a.

Avoid a Lifetime Health Cover loading

In addition to paying more tax if you don’t get health insurance as a young adult, you may also find that your health insurance costs more if you leave it till later in life to sign up. If you don’t have private health insurance on July 1 after your 31st birthday, you may have to pay a Lifetime Health Cover loading.

The Lifetime Health Cover (LHC) loading is an extra 2% on the price of your hospital insurance for each year you are aged over 31 when you take out your insurance. It’s capped at a maximum of a 70% loading and you’ll have to pay this additional amount for ten years.

However, there are various exemptions and reductions available for low-income earners, pensioners, migrants and those who aren't eligible to receive Medicare benefits. The government provides a calculator to help you work out if you have to pay the LHC loading or not.

Types of health insurance

Hospital cover

This can help you pay for medical treatment if you need to be admitted to hospital. It can help cover the cost of your admission or accommodation and the fees charged by doctors, surgeons and anaesthetists. It can also cover other costs associated with a stay in a private hospital.

Extras cover

This helps cover the costs of health care treatments outside a hospital setting which aren’t covered by Medicare. This can include major and minor dental treatment, orthodontics, hearing aids, physiotherapy, glasses, contact lenses and podiatry (in most cases with annual limits).

Cover for singles

This is a standard health insurance policy designed for a single person, rather than being tailored to cater to the needs of a couple or family. It may include hospital cover plus extras, or either of these types of insurance on their own, depending on what you're after for your health cover.

Cover for families

A family health insurance policy is designed for a family unit including dependent children who may reach up to 31 years of age with some insurers. It offers private health insurance suitable for the whole family and may include shared limits for all members included in your policy.

Cover for seniors

A health insurance policy aimed at seniors is designed to appeal to people who are in the second half of their life. These are often specific Silver Plus policies that offer the same cover as other health insurance policies, with the exception that pregnancy and childbirth cover may not be included.

OVHC

Visitors who are in Australia on a temporary basis for travel, work or study may be able to take out Overseas Visitors Health Cover (OVHC). Many visas issued in Australia come with a requirement to take out this type of insurance, which covers visitors who may not be covered by Medicare.

Ambulance cover

Ambulance cover is generally available either packaged into your private health insurance or on its own as a separate policy or subscription. By having this protection, you could be covered for all eligible ambulance travel in Australia (subject to your insurer's terms and conditions).

Basic hospital cover

The cheapest and most barebones form of private hospital insurance, this can include cover for rehab, in-hospital psychiatric services and palliative care. Having this policy will enable you to avoid paying the Medicare Levy Surcharge (MLS) and Lifetime Health Cover (LHC) loading.

Bronze hospital cover

Bronze hospital cover is a step up from basic insurance, including 18 further clinical categories such as ear, nose and throat, bone, joint and muscle, digestive system, joint reconstructions, gynaecology and chemotherapy, radiotherapy and immunotherapy for cancer.

Silver hospital cover

Silver hospital cover is the second-most expensive type of policy and offers the second-most clinical categories. On top of what's offered by basic and bronze cover, it also includes heart and vascular system, lung and chest, blood, hearing device implantation and dental surgery.

Gold hospital cover

The highest level of private hospital insurance available in Australia, gold policies can offer cover for pregnancy and birth, weight loss surgery, assisted reproductive services and insulin pumps on top of all the categories provided by silver, bronze and basic hospital insurance.

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Frequently asked questions about health insurance for young adults

What isn’t covered by health insurance for young adults?

There are some treatments that aren’t covered by private health insurance. These include:

MRIs, x-rays and blood tests performed as an outpatient
Tattoo removal
Breast augmentation or reduction for cosmetic purposes
Tummy tucks for non-medical purposes
Most other cosmetic surgery
Surgery not considered medically necessary

Can I suspend my health insurance if I’m a young adult going overseas to travel?

Yes – if you have health insurance and know that you’re going to be overseas for an extended period, you can ask your health insurance provider to suspend your cover whilst you’re overseas to save some money. However, this isn't mandatory, so ask your individual health fund if they do have a suspension policy. It’s important to note that suspending your policy may result in you having to pay the MLS for the portion of the year your cover was inactive.

What ‘adequate insurance’ do I need as a young adult to avoid paying the Medicare Levy Surcharge?

The government defines adequate health insurance as being a policy which offers hospital cover with an excess of no more than $750 for singles or $1,500 for couples or family policies. A basic hospital cover policy is the minimum health insurance you’ll need to avoid paying the MLS.

Is there a cooling-off period after I buy health insurance as a young adult?

Yes – all health funds offer a 30-day cooling-off period during which time you can ask for a full refund if you’ve changed your mind about the insurance, assuming that no claim has been made against the policy.

Health insurance by age group

Babies

Kids

Under 30s

Over 50s

Over 60s

Over 65s

Over 70s

Helpful health insurance guides

Looking for health insurance to cover your condition or treatment?

Read one of our helpful guides on a range of different ailments and potential hospital or extras treatments to help you find out if they're covered.

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