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Health Insurance Guide for Newly Married Couples

Jonathan March 23rd, 2015 0 comments

Getting married is an exciting milestone in your life.  It also brings many financial changes as you combine two households into one.

One of the things to consider when you merge your lives as a married couple is whether you should make changes to your health insurance to reflect your new life situation.  You may wish to obtain a couple’s policy, rather than a single’s policy, once you have become eligible to do so.  A change in household income can also affect requirements for purchasing health insurance. If you are thinking about expanding your family with a child, you will also need to plan ahead for this milestone.

Should a Married Couple Purchase Couples Health Insurance?

The first decision you will need to make when you have married is whether you should purchase a couple’s health policy or whether you should each keep the existing policies that you have.  Individuals in both a homosexual or heterosexual marriage have the opportunity to buy couples cover, as do couples who are in a de facto relationship.

Purchasing a couples policy usually has lower premiums than if you each have separate singles policies. When you purchase a couple’s policy, you can select a policy that has a combined annual limit. This allows each spouse flexibility to choose desired services independently, while still benefitting from the lower costs of having just one health fund.

When purchasing a joint policy, it is important to consider each spouse’s prior insurance status.  Rules on Lifetime Health Cover impose a two per cent age load cost for each person over the age of 30 who buys insurance for the first time.  This means premiums will be two per cent higher than the base cost of coverage for each year that you are over 30.

If one spouse has not had cover in the past and will now be subject to an added age load cost, this additional expense must be considered when deciding on whether to buy a joint policy.  In most cases, it still makes financial sense to buy a combined policy. The uninsured spouse needs to get some type of cover as soon as possible to avoid costs going higher, since the age load cost adds on two per cent each year.  There is generally no reason that this newly purchased policy should not be a couple’s policy.

Will I Have to Re-Serve Waiting Periods When I Switch to a Couple’s Policy?

If you already had existing cover, it is natural to be concerned about the impact of switching health funds. Fortunately, portability rules protect your right to switch from one policy to another, and even from one health fund to another. As long as you maintain a similar level of cover, you will not usually need to serve any waiting periods again for hospital cover. While the laws do not regulate waiting periods for Extras cover in the same way, most policies also allow you to transfer your Extras cover with no new waiting periods.

However, if your new policy has a higher level of benefits, you may need to serve a waiting period before you become eligible for these new benefits.

What if We Are Planning to Start a Family?

If you are planning to start a family, you need to look for a health fund that offers obstetrics cover.  While most couples policies give you the option to add pregnancy and birth services, there may be more restrictions on the availability of cover for fertility treatments. You should carefully research the types of fertility treatments, prenatal care and childbirth coverage of a policy you are considering if you think you may become pregnant.

There is usually a 12-month waiting period before the costs of pregnancy and child birth are covered by insurance so you should sign up for this type of cover well in advance of actually trying to conceive a child.

A couples policy provides cover for your costs before and during child birth. If your child needs emergency medical care at birth, you may have to pay out of pocket costs if you have not switched to family cover before the birth occurs. You may need to upgrade to family cover as early as three to four months before your child’s birth to ensure cover from day one.

How Does Combining Income Affect Taxes and Premium Benefits?

When you marry, you no longer consider your individual income when determining if you are eligible for a tax rebate or determining if you will be charged a Medicare Levy Surcharge. You must consider household income instead.

Medicare Levy Surcharge Calculator

The Medicare Levy surcharge is an additional fee paid on top of the 2% Medicare Levy Surcharge that most Australian taxpayers pay. You can avoid the surcharge if you have Private Health Insurance (Hospital Cover).

The exact surcharge level you'll need to pay depends on your income level and relationship/family status. Use the slider and dropdown menu below to determine what surcharge you're liable for if you don't have private hospital cover.

Please select status

Your Medicare Levy Surcharge is 1% of your income, or $2050
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
Medicare Levy Surcharge
Standard Tier 1 Tier 2 Tier 3
All ages 0.0% 1.0% 1.25% 1.5%

This calculator helps you to determine the Medicare Levy Surcharge that you would need to pay if your combined income as a couple exceeds a certain level and you have not purchased Hospital cover. In general, while singles are not faced with additional tax if their income is below $90,000, married couples do not get taxed until their combined income reaches $180,000.

Health Insurance Rebate Calculator

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.

Please select status

You are entitled to a 1% Government Rebate on Your Private Health Insurance Policy.
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
Base Tier 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%

This calculator provides information on the health insurance rebate you may receive to subsidize the premiums for hospital cover. For singles, you can receive a rebate if your income is below $140,000. For couples, you may be eligible for a rebate up until your combined household income is $280,000.

Shopping for Cover as a Married Couple

After your marriage, take the time to get quotes and to learn about the different cover options for a couple.  You can obtain a joint policy quote and find out exactly what types of cover would be available to you at what price. Be sure to take both the health needs of both partners into account so you can find a joint policy that is affordable and that covers the services that you need now or that you expect to need as your family grows.

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

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