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Health Insurance for Couples

Jonathan January 5th, 2015 0 comments

Purchasing private health insurance limits out-of-pocket costs and gives you broader choices than Medicare cover. If you are legally married, in a registered relationship or living in a de facto relationship, you have the option of either purchasing singles policies or purchasing a couple’s policy. There are advantages and disadvantages to each option and you need to carefully shop around for the health insurance fund that is right for you.

Couples vs. Singles Health Insurance Policies

Couples in a homosexual or heterosexual marriage have the option to purchase couples cover, as do individuals living together in a de facto relationship.  A couples policy refers to one health insurance policy that covers both partners.  Each member of a couple may also purchase his or her own singles cover instead of purchasing couples cover.

Purchasing a couple’s policy has some advantages:

  • The cost of insurance premiums is usually lower for a couple’s policy than for two singles
  • You can choose a policy with a combined annual limit so each partner can select the Extras services of their choice. For example, one partner could get dental treatment and the other mental health care services or occupational therapy.
  • Couples policies often have more extensive cover for family planning needs. Lower-cost singles policies may exclude cover for things like fertility treatments or pregnancy services. You can choose a couples policy that includes these.

When Do You Become a Couple for Health Insurance Purposes?

In Australia, you are eligible for couples cover provided that you are either :

  • Married
  • In a registered opposite sex or same sex marriage
  • In a de facto relationship

A de facto relationship exists if two unmarried and unregistered partners live together in a romantic relationship. There is no minimum time period that you must live together before you are viewed as being in a de facto relationship.

The Australian government provides a rebate to most individuals who purchase private health insurance cover. This rebate is income tested. If you are in a registered relationship, are married or in a de facto relationship, you will be subject to the family income thresholds rather than the singles income thresholds when determining your income for purposes of rebates.

For those who make above a certain income and who do not have Hospital coverage, the Medicare Levy Surcharge also comes into play. Married and registered partners as well as people in a de facto relationship must combine their incomes and are subject to family tiers for purposes of assessing their Medicare Levy Surcharge.

Couples Policies and Lifetime Health Cover Loads

The Australian government has a system in place called Lifetime Health Cover, which is designed to encourage young people to buy Hospital cover.

If you have purchased Hospital cover prior to age 30, you can lock in a lower rate. If you do not do this, you are subject to  a two percent age loading for each year that you were aged over 30 and were without Hospital cover. For example, if you are 35 when taking out cover for the first time, you would incur a 10 percent age loading cost.

It is common for partners to be different ages and have different cover histories. If either party is over 30 and has not had prior Hospital cover, the age load cost must be considered when taking out a couples policy.

Age at Marriage Chart

The age loading of each spouse or partner is averaged when a joint policy is purchased. For example, if the wife purchased insurance at age 25, she has no age loading. If the husband purchased cover at 35, he has a 10 percent age load cost. When a couples policy is purchased, there is an average load of five percent. The age load is dropped after 10 years of continuous Hospital cover.

Your Life Stage and Your Couples Cover

When purchasing couples cover, the needs of both individuals need to be taken into account. These needs can change as you both age and experience life milestones.

Younger couples often look for cover for obstetrics, fertility treatments and pregnancy. Premiums for policies covering pregnancy services may be higher and this cover can be dropped once you have had children.  Most funds have a 12-month waiting period for pregnancy cover so planning ahead is essential if you are thinking about starting a family.

Once you have had children, purchasing family cover is important to provide needed health benefits for children. Children can be covered until age 21 on a family policy, or until age 25 provided they are student dependents.

Family Structure Chart

After children leave home, you can return to a couples policy. For senior couples, pregnancy cover is no longer necessary. Extras services that senior couples may look for include hearing aids; chiropractic care; and home nursing care, for example.

Each partner’s individual needs may differ so couples should look for policies that have a combined annual limit and that permit each partner to select the Extras cover of their choosing.

Pregnancy and Family Cover

Medicare provides cover for pregnancy only in public hospitals.

Private hospital cover provides broader cover for pregnancy and birth-related services.  However, some health funds pay only restricted benefits that cover private patients in public hospitals.  If you want to have your baby in a private hospital, you must look for a health fund policy that provides this cover.

Delivery Suite at Mater Hospital in Australia

Pregnancy cover can be purchased as part of a singles policy or as part of a couples policy. Not all policies for either singles or couples offer this cover.

All health funds have a 12 month waiting period before providing any type of cover for pregnancy. This means you must have cover for obstetrics treatments well before you fall pregnant.

How Many Babies are Born in Australia Each Year?

Obstetrics cover generally provides payments only for pregnancy-related treatments and does not pay for medical care for the infant.  Healthy babies are not formally admitted to a hospital so no charges are raised for their care. If the baby requires any treatment, however, he or she may be admitted as an in-patient and charges will apply.

For parents who have twins or multiple births, at least one baby is formally admitted to the hospital as a matter of policy. This results in out of pocket costs unless you have family cover.

Switching to family cover before the baby is born is advisable to protect your finances in the event that your infant incurs unexpected medical costs.  Most funds require switching to a family level policy between one and three months prior to the birth of the baby.

Does Pregnancy Cover Provide Cover for Fertility Treatments?

 Not all policies that provide obstetrics cover include assisted reproduction treatments like in vitro fertilization (IVF).  Even when IVF is covered, typically only aspects of the treatment requiring admission to a hospital are paid for by hospital insurance. IVF treatment has multiple steps, many of which do not require hospital admissions.   These outpatient treatments often need to be paid out of your own pocket. The standard waiting period for IVF cover is 12 months.

Tax Implications for Couples Insurance

Health insurance rebates are available from the government to assist with the payment of health insurance premiums. Becoming a part of a couple affects your eligibility for health insurance coverage rebates.

Rebate amount is based on your income and there are different income thresholds for individuals versus couples/families. Anyone who is married, in a registered relationship or living in a de facto relationship is subject to family tiers.  It is important to understand that living as a couple may affect your ability to claim rebates. Rebate tiers for individuals and families/couples are as follows:

Singles
Families
$90,000
$180,000
$90,001-105,000
$180,001-210,000
$105,001-140,000
$210,001-280,000
$140,001
$280,001
Rebate
Standard Tier 1 Tier 2 Tier 3
< age 65 25.934% 17.289% 8.644% 0%
Age 65-69 30.256% 21.612% 12.966% 0%
Age 70+ 34.579% 25.934% 17.289% 0%

Australia also charges a Medicare Levy Surcharge for higher income individuals who do not purchase Hospital cover. Individuals who are living in a couple relationship must use the family tier to determine if they are subject to a surcharge based on their combined income:

  Unchanged Tier 1 Tier 2 Tier 3
Singles $90,000 or less $90,001-105,000 $105,001-140,000 $140,001 or more
Families $180,000 or less $180,001-210,000 $210,001-280,000 $280,001 or more
Medicare Levy
Surcharge Rate
0% 1% 1.25% 1.5%

 Disclaimer: The above information is correct and current at the time of publication.

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