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Last Updated on 21 March 2018

Health Insurance for Families

Being a parent is a huge responsibility, and part of that responsibility involves making sure that your children grow up to be strong and healthy. Children are prone to accidents and can get sick frequently as they are growing up. Kids may also have many different needs as their bodies grow and develop, from routine dental care to braces to eyeglasses. While Medicare covers some hospital costs if your kids get sick, it does not come close to offering all of the healthcare coverage that growing families with children may require. As a result, it is important to shop for a private health insurance policy that meets your families needs.

The Cost of Kids

Should You Buy Family Cover?

It is possible for every member of the family to buy a separate health insurance policy. It is also possible to purchase dependent-child only cover and not purchase health insurance for yourself and your spouse. In almost all situations, however, it makes sense for you to purchase a family policy.

Buying a single policy that covers the entire family can be less expensive than trying to purchase individual cover for each family member. A family policy that covers everyone protects you from large out-of-pocket expenses in case any member of the family becomes ill or gets hurt. Some policies also offer special features, like 100 percent back for kids Extras cover, if you buy comprehensive family coverage.

When Should You Upgrade to a Family Policy?

There is a 12-month waiting period for obstetrics cover. If you want your policy to provide you with care during your pregnancy and for the birth of your baby, you must purchase obstetrics cover before you get pregnant.

A couples policy with obstetrics cover will pay for labour and delivery, but not for any care the infant may need upon birth. Many funds require you to upgrade to a family policy between one and three months before your baby is born so the infant will be covered if he or she is admitted to the hospital and needs immediate care.

What Types of Cover Should You Look for?

Children often have special needs for health insurance cover.  Some of the different types of treatments your child may require that private health insurance can cover include:

  • Hospital care: Medicare covers public hospitals but only some treatment as a private patient. There may be a long wait for care in a public hospital for procedures that kids commonly undergo. For example, the wait time for a tonsillectomy can be around 100 days.

    How long could your child have to wait for care?

    Health Insurance Waiting Period Estimator

    You will have to serve a waiting period when you start a new private health insurance policy or increase your level of cover. A waiting period protects members of the fund by ensuring that individuals aren't able to make a large claim shortly after joining and then cancelling their membership. This kind of behaviour would result in increased premiums for all members.

    Use this calculator to choose a hypothetical date in the future (or leave it on the default setting, which is today's date) to determine when you will be covered for various types of coverage.

    Months Standard Waiting Period
    • Accidents
    • Ambulance
    • Chiropractic/Osteopathic
    • Alternate/Natural Therapies
    • Dietetics
    • Eye Therapy
    • Hospital Treatment
    • Occupational Therapy
    • Pharmaceutical Perscriptions
    • Physiotherapy
    • Podiatry
    • Speech Therapy
    • General Dental
    • Optical
    • Orthotics
    • Major Dental
    • Pre-Existing Conditions
    • Pregnancy Related Services
  • Dental and orthodontic care: The Medicare Child Dental Benefits Schedule pays $1,000 in dental expenses maximum over a two year period for children ages two and 17. No other dental or orthodontic treatments are covered unless you purchase an Extras policy with dental cover. Many children require the removal of wisdom teeth, braces, retainers and other types of costly dental or orthodontic care. Look for a policy that pays for these treatments.
  • Speech therapy: Children may experience speech impediments as they learn to talk. If not corrected, these impediments could plague them for the rest of their life. Extras cover can pay for speech therapy if your child needs it.
  • Glasses and contact lenses: As your children’s eyes develop, they may be nearsighted or farsighted. Eye tests are covered by Medicare, but no vision correction is. Kids may need glasses in order to be able to see the blackboard or see when they cross the road. Extras cover can ensure you are able to get them the help they need to see the world as they grow.

These are just some of the different examples of needs that your child may have. You and your spouse likely will also have needs, including chiropractic care, vision correction, hospital care for emergencies, and dental care. Buying a family hospital and Extras policy will allow everyone to stay healthy without worrying about large out-of-pocket costs.

Will a Family Policy Cover Pregnancy?

A singles, couples and family policy can all cover pregnancy provided you have purchased a policy with obstetrics cover. However, there is a 12 month waiting period before your policy is required to pay for pregnancy, labor and delivery. If you are planning to have a child, or to have more children, purchasing obstetrics cover in advance is essential.

Will a Family Policy Cover Fertility Treatments?

The Extended Medicare Safety Net in Australia can provide a capped-rebate for some in vitro fertilization (IVF) related treatment when an annual threshold has been reached for the year. However, most assisted reproductive technology treatments make you eligible for a rebate only if an insemination procedure is involved. Hospital and day surgery services, including embryo transfer and egg collection, are not covered.

Success Rate for Fertility Treatments

Because Medicare covers so little in terms of assisted reproductive technologies, you must purchase health insurance cover if you want to limit out-of-pocket expenses when trying to get pregnant.

Not all health funds cover infertility treatments. When treatments are covered, infertility is typically defined as the inability to conceive after one year of trying. Assisted reproductive technologies can be subject to the 12-month waiting period applicable for pre-existing conditions.

Health funds may also cover some components of in vitro fertilization (IVF) and gamete intra fallopian transfer (GIFT).  If you have purchased private hospital cover but not Extras cover, your fund may only pay benefits if there is a Medicare number assigned to the particular service or treatment. Consultations with clinics, ultrasounds, diagnostic and pathology services, and IVF drugs may or may not be covered depending upon the particular policy.

Some Extras funds are much more comprehensive when it comes to reproductive technologies. Be sure to carefully review the details of any policy you are considering if you suspect you may require fertility treatments.

How Do Cover Needs Change As Children Get Older?

As children get older, you may wish to purchase different types of health insurance to meet their changing needs. Portability rules permit you to change hospital cover without re-reserving any waiting periods. These rules do not apply to Extras cover. However, many health funds will not make you re-serve waiting periods for Extras cover either, as long as you do not upgrade your cover. If you upgrade or purchase different types of Extras cover, you will be subject to a waiting period before the better benefits kick in. This makes it imperative to shop for cover several months before your child is expected to need a new type of care.

How Do Tax Laws Affect Family Coverage?

You are entitled to a rebate for premiums paid for hospital cover if your family income is below a certain level. If your combined family income is below $180,000 and you are all under the age of 65, you are entitled to a rebate equal to 26.791 percent of premium costs. If your family income is between $180,001 and $210,000, then you are entitled to a rebate of 17.861 percent. For a family income between $210,001 and $280,000, you are entitled to a rebate of 8.930 percent. The income limits for rebates are double for families what they are for singles.

Depending on your age, family status, and income level, you may be entitled to a Government Rebate on your private health insurance policy. Use the sliders and dropdown menu below to calculate your rebate.

Your Rebate is 0
Singles < $90,000 $90,001 - 105,000 $105,001 - 140,000 > $140,001
Families < $180,000 $180,001 - 210,000 $210,001 - 280,000 > $280,001
Base Tier Tier 1 Tier 2 Tier 3
Age < 65 25.415% 16.943% 8.471% 0%
Age 65-69 29.651% 21.180% 12.707% 0%
Age 70+ 33.887% 25.415% 16.943% 0%
How much is your Health Insurance Rebate worth?

If you choose not to purchase hospital cover, you can be charged a Medicare Levy Surcharge. This penalty kicks in at a combined family income of $180,000.

The premium rebate for your family cover can be claimed with your taxes or used to offset premiums to reduce the costs of buying insurance.  The tax laws allowing this rebate are designed to make it easier for you to make sure you and your children have the cover you need. .

How Long Can Children Stay On Your Policy?

Your children may remain on a family policy until age 24 if they are full time students and are still considered dependents.   When your children leave home and are no longer students or dependents, they will need to purchase their own policy.

When your children leave home and are no longer students or dependents, they will need to purchase their own policy.

Frequently Asked Questions About Health Insurance

There are three types of health insurance in Australia. They are:

  • Hospital Cover
  • Extras Cover (also known as general or ancillary cover)
  • Ambulance Cover

Hospital cover can ensure any unexpected surgeries, treatments or hospital stays you may require will be covered. With appropriate cover you will have the flexibility to choose your own doctor and the option of receiving treatment in a private hospital.  Most hospital covers allow you to stay in a private room. One other perk is skipping the public hospital systems’ waiting list, which can be lengthy for non emergency treatment.

Extras cover pays benefits for a a range of services, often including treatments and procedures related to the fullowing:

  • Dental/oral health
  • Glasses and contact lenses
  • Podiatry
  • Physiotherapy
  • Psychulogy
  • Acupuncture
  • Remedial massage
  • Chiropractic
  • Hearing aids
  • Travel vaccinations

Ambulance cover, as the name suggests, will cover you should you require emergency ambulance transport. In an emergency, there is enough to worry about. Having the expenses covered for provides security and peace of mind. Many hospital covers include emergency ambulance transport If yours doesn’t, you will need to shop for this separately.

Life is unpredictable. You never know when you might need cover. No matter what life stage you’re in, there’s a policy out there for everyone. You can select as much or as little cover as you want, depending on your health needs and requirements. It’s a small price to pay for the peace of mind health cover provides.

There is no one answer here. Costs vary across providers and policy types. Just because a policy is cheap, that does not mean it is ‘value for money’ and vise versa. Make sure you check what’s included and excluded in a policy before signing up, as you want to purchase a policy that best fits your specific needs.

Premium: A premium is the price you pay for your insurance policy (it may be paid annually or on an ongoing basis).

Policy: An insurance plan. In other words, it is the type of insurance you choose to select.

Policy Holder: The owner, or ‘holder’ of a policy.

Claim: In the event that you require treatment for a service covered by your policy, you can lodge a claim for reimbursement of all or part of the cost of that treatment.. These days, most claims are submitted electronically by the health care provider (dentist, physio etc)

Lifetime Health Cover: Lifetime Health Cover was put in place to encourage young Australians to seek out and maintain ownership of private health insurance early in their lives. If you do not take out a policy before you turn 31, extra charges will be applied should you take out a policy at a later time.

This means you will pay a 2% loading on top of your premium for every year that passes after you turn 30. For example, if you take out a policy for the first time at age 32, you will be charged 4% of your premium as an extra, then at age 40, 20% and so on, up to a maximum loading of 70%.

The loading is payable for 10 consecutive years of cover - after which it is removed and you premiums will be reduced.

Pharmaceutical Benefits Scheme (PBS): Medicare offers assistance for Australians with many of their their prescribed medication costs through the PBS. This assistance is in the form of subsidies towards the cost of many medications. You can check if your prescribed medication is on the list of subsidised items here.

Medicare Levy Surcharge: The Medicare Levy Surcharge is an additional charge (tax) applied to single Australian taxpayers who earn over the income threshold of $90,000 per year, or families/couples who earn over $180,000 per year. This surcharge is only applied to those who choose not to have a private health insurance policy.

The surcharge is designed to reduce pressure on the public health system by encouraging those with higher incomes to invest in private health cover.

Private Health Insurance Rebate: The government’s Private Health Insurance rebate lowers premiums for most Australians with private health insurance Older Australians may enjoy an even higher rebate. Our calculator can help you estimate the Government health insurance rebate you may receive.

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

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Emma Deriu

Emma Deriu is a psychology graduate from Sydney, Australia, with personal interests in health, lifestyle and wellbeing. Emma currently writes about all things health insurance, aiming to 'make insurance easy' for consumers who are looking to compare policies.