Other significant health insurance changes outlined in the federal budget relates to adult dependents with disabilities. The 2020/2021 budget determined that the age limits for disabled dependents would be scrapped entirely. This means that you may now be able to keep them on your private health insurance indefinitely.
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Which insurers have implemented the dependent age increase reforms?
This bill was not mandatory, and it was left to the discretion of the insurer whether they would implement it or not. As a result, it took a fairly significant amount of time for insurers to begin implementing this bill in their policies. Towards the end of 2022, the vast majority of health insurers in Australia made changes to dependent eligibility criteria.
The following list outlines the maximum dependent age from several major insurers:
- Medibank: Allows dependents between the ages of 24 and 30, and covers dependents until their 31st birthday.
- Bupa: Student dependents can remain on their parents policy from the age of 21 to 32 if they are studying full time and are not earning an income.
- HCF: Children can stay on their parents health insurance up to the age of 22. If they are a full time student, they may be able to stay on the parents insurance until they turn 25.
- Nib: Child dependents are permitted to age 21 and student dependents to the age of 25.
- HBF: Unmarried adult children, not living in de-facto relationships can stay on their parent’s cover until 25.
- Australian Unity: Allowed on a parents policy up to 23 years old.
- Teachers Health: Adult dependents will be covered on a family policy up to 32.
- GMHBA: Full time students between 21 and 25 years of age may be able to stay on a parents health insurance policy.
- Defence Health: Parents can keep children who are single and studying full-time up to 25.
- CBHS: Student dependents between the ages of 18 and 25 are generally allowed.
Dependent Age Increase Bill now in effect
On the 22nd of July 2021, it was announced that the Private Health Insurance Legislation Amendment (Age of Dependants) Bill 2021 had finally been passed at both the parliament and senate level. It then took a further 90 days for the final act to come into effect by proclamation. A few minor amendments were outlined for this bill, and it took a further year for insurers to adopt the bill in their policy documents.
When were these reforms implemented?
In a recent study by the Australian Institute of Family Studies (AIFS), it was revealed that 43% of 20–24 year-olds still lived with their parents and 17% of 25-29 year-olds still live at home. So, a significant portion of the population stands to benefit from the proposed changes.
Although there were several major delays, which resulted in the act only being passed at the end of September 2021, These changes were implemented from 1 April 2021, however, as it took a number of months for the bill to be passed, the changes have really only been implemented from the proclamation date. Although the bill has been passed, insurers may not have changed their policies to reflect this.
Why have these health insurance changes been made?
There are several contributing factors to the reforms related to dependent ages. However, the most significant reason is that it may help ensure continuity of cover for young adults. Now, dependents up to age 31 will have a better chance to find well-paying jobs and afford their own private health insurance once they are no longer able to stay on their parent’s policy.
This reform means that young adults can stay on their parents’ health cover until the Lifetime Health Cover (LHC) loading commences. So, they’ll have a clearly defined point at which they’ll need to decide their health cover. The government hopes that with this extended period of cover under their parent’s policy, young adults are more likely to see the benefits of private health insurance.
Benefits of this reform
- Financial support: Allowing adult children the opportunity to stay on their parent’s private health cover for an extended period means that they’ll be able to rely on financial support from their parents for a little longer. This should allow them to build their financial security without needing to worry about health coverage.
- Time to think about the LHC loading: When you turn 31, you’ll need to apply for private health insurance, or a 2% loading will be added to your insurance premiums when you take out cover later in life for every year you did not have cover. Increasing the dependent ages for private health cover gives young adults time to think about their cover requirements before the loading is applied.
- Relieves the strain on Medicare: Due to the Covid-19 pandemic, hospital patient volumes have dramatically increased, leaving hospitals overwhelmed and unable to support simple procedures. Now more than ever, private health insurance policies need to remain accessible and affordable. With the changes in health insurance plans for families, more former dependents will take out private cover and won’t need to rely on public hospitals for medical care.
- Could keep health insurance premiums more affordable: In previous years, more young Australians opted out of their health insurance policies as they did not have the funds to afford their own cover once they were no longer a dependent of their parents’ health insurance policy. As a result, the cost of premiums had to increase to make up for the increased demand on the public health sector. Due to the new health insurance reform, young Australians have the time to find financial security and can decide to take out their own policies at the age of 31. This keeps health insurance premiums affordable as the demand and supply for premiums remain at a desirable level.
Reforms for adult children with disabilities
If you have an adult-dependent child who has a disability, you’ll be able to keep them on your private health insurance from the 1st of April onwards. These new reforms have removed age limits for children with disabilities. This means you won’t need to worry about your disabled child’s health care as they won’t need to purchase a standalone policy after they turn 24.
How to keep a dependent with disabilities on my private health insurance
If you have a dependent child with disabilities and want to keep them on your private health insurance, some options are available. You could potentially consider Health Care Insurance (HCI), which offers cover to children with a disability aged 32 or older if they meet relevant eligibility rules. However, it’s important to note that they may need to prove their disability each year.
Other insurers may also offer cover for your dependent with disabilities. However, it’s best to contact the insurer directly to find out whether it’s available and what their specific requirements are. Keeping a dependent with disabilities on your private health insurance can give them access to the medical care they need, so it’s important to explore all your options.
Frequently Asked Questions and Answers
How long are dependents covered under health insurance?
Dependents of Australian health insurance are now covered until the age of 31, while dependents with disabilities can remain on their parents’ health insurance policy indefinitely.
Who is considered a dependent?
A dependent is a person who is financially dependent on the insurance policy’s primary member. A dependent is usually the child of the main policyholder.
Should you get private health insurance if you’re no longer on your parent’s insurance?
While the decision is up to you, it is recommended to get private health insurance if you are no longer a dependent. Having health insurance will protect you should you need to receive health care but cannot afford the medical procedure’s full cost.
Can you drop a dependent from health insurance at any time?
Yes, you may remove a dependent from your health insurance cover at any time, but it is mainly done when the dependent has applied for their own private health insurance policy.
Can I add you add your adult child over the age of 25 to your health insurance?
If you were forced to remove your adult dependent child from your private health insurance before the dependents age increase came into effect, you’ll still be able to add your child to your policy as a dependent. However, you won’t be able to have them added to your policy if they are over the age of 31 or if they are not totally and permanently disabled. Generally, it’s best to consult your insurer directly to learn whether or not you’ll be able to add your child to your policy.