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Aged-Based Health Insurance Discounts for Young People

Megan Fraser Fact Checked Updated: 07 August 2020
Types of Health Insurance

If you’re under the age of 30 and looking for affordable private health insurance, you might want to buy from an insurer that offers age-based discounts.

From 1 April 2019, health insurance providers can offer Australians aged 18 to 29, a discount on their private Hospital premiums.

The discount you receive on your hospital cover depends on your age when you first purchase an eligible policy.

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Age-based discounts for 18 to 29-year olds

As part of the Australian Government’s health insurance reforms, health funds can now offer young Australians a 2% premium discounts on Hospital cover for each year they’re under the age of 30 when first purchasing Hospital cover. The discount does not apply to Extras cover.

Percentage discount by age

Your age when purchasing a Hospital policy that offers the youth discount* Percentage discount a health fund may provide
18 to 25 years old 10%
26 years old 8%
27 years old 6%
28 years old 4%
29 years old 2%
30 years old 0%

Source: Australian Government Department of Health (24 September 2019).

*Take note: For existing policyholders, there’s a transitional agreement; your discount depends on the age you were when the insurer first introduced the aged-based discount on their Hospital policies. For example, if you were 26 on 1 April 2019, you could get an 8% discount, even though you first purchased Hospital cover when you turned 21.

How does this insurance policy discount work?

If you’re a young single adult or couple under the age of 30 on or before 1 April 2019, you may qualify for an aged-based discount between 2% and 10% on eligible Hospital policies.

For example, a 25-year-old young single adult on a $350 hospital policy could save up to $35 every month until they turn 41.

You’ll have the discount up until you’re 41st birthday if you maintained continuous Hospital cover. After age 41, your discount reduces by 2% each year until it reaches zero.

The discount is calculated on your base premium before any rebates, additional discount and the Lifetime Health Cover (LHC) loading.

The savings will usually be available to all eligible policyholders, including new and existing customers.

Which health funds offer the aged-based discount?

The youth discount is voluntary for health funds. The insurer can choose whether they want to offer this discount and on which products. As of 24 September 2019, the following insurer’s offer the aged-based discount:

Source: Individual health fund websites (24 September 2019)

Take note: The above list is not comprehensive. There might be more health funds offering the youth discount.

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Is health insurance for young adults worth it?

When you’re under the age of 30, and unable to remain on your parent’s health plan, you might want to consider your own private health insurance policy. While Medicare might provide excellent coverage for most Australian citizens, you’ll still be out of pocket for health services and treatments that exceed the Medicare Benefits Schedule (MBS).

Also, when buying Hospital cover before 1 July following your 31st birthday, you’ll be able to avoid paying the Lifetime Health Cover loading.

Private Hospital cover helps pay for in-hospital procedures and specialist treatments. You can choose your doctor and possibly skip the waiting list. Since 1 April 2019, many health funds offer a discount of up to 10%, when purchasing Hospital insurance between the ages of 18 and 29.

Extras cover provides a benefit for general treatments received out of the hospital, for example, dental, optical, physiotherapy and psychology. Select health funds offer additional incentives on their Extras policies, for example, gym membership discounts.

What’s the best health insurance for young adults?

The best health cover for young people under the age of 30 is a policy that meets your specific requirements, while also offering ways you can keep your cover affordable — for example, aged-based discounts and sing-up incentives. You might want to request quotes from some of Australia’s biggest brands and compare their offerings.

How much is health insurance for young adults?

The cost of your health insurance policy depends on the health fund you choose, your type and level of coverage, as well as the state you live in. For example, health insurance for a 26-year-old living in NSW, purchasing a Basic Hospital and Extras policy could cost between $110 and $145 per month (as of 24 September 2019).

How long can you remain on your parent’s health insurance?

Once you turn 22, you generally need to get your own health insurance policy; however, there are alternatives:

  1. If you’re a full-time student and single, your parents can register you as a Student Dependent, and you may be covered at no extra cost until you turn 25 or complete your studies.
  2. When you’re between the ages of 22 and 24 and not a student, your parent might be able to add you to their policy for an additional fee; this is generally called an Extended Family option.

Frequently asked questions

  • Can you still get the age-based discount if you already have cover?

    Yes, the aged-based discount applies to new and existing customers. However, if you already have Hospital cover, the discount percentage will be calculated on the age you were when the reform was implemented – 1 April 2019.
  • Will my discount continue if I switch policies?

    A health fund can decide if their age-based discount products will honour your existing discount when you change funds or transfer between products. Before you switch, confirm with the insurer if your current discount will continue to apply to the new product.
  • What if you cancel cover and take out a new policy later?

    Generally, your youth discount on health insurance will remain in effect as long as you continue to hold an eligible hospital policy. Some health funds might allow you to reclaim your age-based discount after cancelling and re-joining within a specified period. However, when there’s a gap period in cover means you may lose your original discount.
  • How much do you save on a couple or family hospital plan?

    If you have a couple’s or family policy, the aged based discount will generally be calculated on the average of the discounts applied to the two adults. For example, if the principal member has an 8% age-based discount and their partner has a 2% discount, the discount will be 5% (8% + 2%) divided by 2 adults.
  • If I suspend my policy to travel overseas, will my discount continue when I return?

    Generally, your discount percentage will remain locked in when your policy is reactivated upon your return to Australia. For example, if you had an 8% discount before suspending cover, the 8% discount on hospital premiums should continue. However, this varies from fund to fund. Be sure to contact your health insurance provider before suspending cover.

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