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How to Choose a Family Health Insurance Plan

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Anneke Van Aswegen Published: 08 July 2020
Types of Health Insurance

Whether you are planning on starting a family, have dependant children or are a single parent, you may be wondering whether it is a good idea to get private health insurance. When looking for family cover, people generally look for an insurance fund that covers the broadest range of services and treatments while still offering value for your money.

There are a wide variety of health insurance companies that offer a range of cover options that may suit your families requirements and circumstance. This can be used to help pay for medical services and treatments that may not be covered by Medicare.

Use this article to learn more about selecting private health insurance for your family and how to choose the best family health cover to suit your requirements.

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What is family health insurance, and how does it work?

Generally, a family health insurance policy will combine both hospital and extras cover to provide protection for you, your partner and your children to cover the costs of medical services and treatments such as dental, pregnancy services, optical and physiotherapy.

A family health insurance plan generally gives you access to a private room in a private or public hospital. It also gives you the ability to choose your doctor, gives you access to dental services including orthodontics and wisdom teeth removal, optical including glasses and contact lenses, physiotherapy and ambulance services. However, this may vary according to the type of policy you opt for.

Hospital cover for families

This type of health insurance generally covers the costs associated with in-hospital treatments and accommodation as a private patient in a public or private hospital. There are several different levels of cover available to choose from when you are looking to apply for hospital cover. Depending on the level of cover you opt for, your insurance may include things such as prostheses, ambulance services, and pregnancy-related treatments.

Although private hospital insurance generally covers the cost of in-hospital services performed by a doctor, as well as accommodation and theatre fees, you might be required to pay an excess upon admission. In addition to this, your policy might cover the cost of the remaining Medicare Benefits Schedule (MBS) fees not covered by Medicare. However, this will generally depend on the amount your doctor wishes to charge for treatment and the level of care that you have chosen. Some funds also include gap cover, which can help to reduce your out-of-pocket expenses when you receive treatment in a hospital.

Family Extras cover

Extras cover is also known as ancillary cover or general treatment services. This type of cover provides a benefit towards the cost of out-of-hospital treatments that are intended to manage or prevent a disease, injury or condition. Extras cover usually helps to reduce out of pocket costs for services such as physiotherapy, vaccinations or chiropractic care.

Generally, you have the option to take Extras cover as a standalone policy, or you have the option to combine it with Hospital cover. Whether you chose a standalone policy or combined cover depends on several factors. This includes past and current health conditions, your family structure, your age and budget.

Combined Hospital and Extras

Most private health insurance companies provide you with the option to combine Extras cover with your preferred Hospital cover. This allows you to create a tailored package to suit your unique requirements. Some funds also provide pre-packaged options that you can choose from. This generally, can help to reduce out of pocket costs associated with services and treatments such as ear, nose and throat, dental and acupuncture.

However, it is important to note that there are different levels of cover that will provide you with a varied range of benefits, depending on your cover choice. Generally, Hospital cover options include Basic, Bronze, Silver and Gold. Each cover option lists various benefits, restrictions and exclusions. Usually, the higher your Hospital cover, the more benefits you’ll receive and the higher your premium will likely be. When applying for Extras cover, you generally have the option to choose between three different levels of cover; Basic, Medium/Mid or Top/Comprehensive cover. Just like with Hospital cover, the higher the tier, the more extras options will be available to you, and the more you will be likely to pay.

Why do you need health insurance for your family?

There are several benefits to taking out private health insurance for your family. It can help to support your family financially by covering some or all of the costs for treatments and services not paid by Medicare. The wide range of cover options on offer by health insurers generally means that you’ll be able to choose a policy to suit your unique requirements.

Some of the advantages of family private health insurance include:

Types of family structures

The type of health insurance you opt for will generally depend on your family structure. Whether you are a new family, or you have grown children who are still studying or are a single parent may influence the type of cover you require for your family and their requirements.

Which health insurance is best for a family?

Generally, most private health insurance funds in Australia allow you to combine a Hospital policy with an Extras policy. This will enable you to create a personalised private health insurance plan. However, some health funds also allow you to choose from their pre-packaged family health insurance plans. Refer to the table below for some examples of the cover options available:

Health FundPolicy NameBenefits Provided
AHM health insuranceClassic package- Silver Plus
  • This policy exempts you from having to pay the Medicare Levy Surcharge (MLS).
  • Accident cover
  • Includes cover for dental surgery, pain management and rehabilitation.
  • Restricted cover for hospital psychiatric services.
  • Extras cover includes general dental, optical and physiotherapy.
  • Two month waiting period for palliative care, rehabilitation and hospital psychiatric treatments, even if pre-existing, 12 months for other pre-existing conditions and two months for all other treatments.
  • Includes unlimited emergency ambulance cover.
Australian Unity Health LimitedAdvantage Choice Combination (Silver Plus)
  • This policy exempts you from paying the Medicare Levy Surcharge.
  • Accident cover
  • Hospital cover for diabetes management, implantation of hearing devices, and sleep studies.
  • Restricted hospital cover for psychiatric services.
  • Two month waiting period for palliative care, rehabilitation and hospital psychiatric treatments, even if pre-existing and 12 months for other pre-existing conditions.
  • Extras cover for general dental, major dental, optical, chiropractic, remedial massage and Chinese medicine.
  • Unlimited emergency ambulance cover.
GMHBA LimitedGMHBA Silver Package
  • This policy exempts you from having to pay the Medicare Levy Surcharge.
  • Hospital cover for bone, joint and muscle, dental surgery, ear, nose and throat, joint reconstructions and skin.
  • Restricted cover for hospital psychiatric services and palliative care.
  • Two month waiting period for palliative care, rehabilitation and hospital psychiatric treatments, even if pre-existing, 12 months for other pre-existing conditions, two months for all other treatments.
  • Extras cover includes general and major dental, endodontic, orthodontic, podiatry, psychology, acupuncture and vaccinations.
  • Unlimited emergency ambulance cover.
HCFHCF MY FAMILY SILVER PLUS $750 EXCESS
  • This policy exempts you from paying the Medicare Levy Surcharge.
  • This policy provides accident cover and benefits for travel or accommodation (outside of a hospital)
  • Includes cover for blood, chemotherapy, kidney and bladder, pregnancy and birth, and tonsils, adenoids and grommets.
  • Restricted cover for hospital psychiatric services.
  • Two month waiting period for palliative care, rehabilitation and hospital psychiatric treatments, even if pre-existing, 12 months for other pre-existing conditions, 12 months for pregnancy and birth, two months for all other treatments.
  • General Extras cover includes optical, dental, dietetics, osteopathy and exercise physiology.
  • Unlimited emergency ambulance cover with a waiting period of one day.
Medibank Private LimitedMedibank Silver Plus Families
  • This policy exempts you from the having to pay the Medicare Levy Surcharge.
  • This policy provides accident cover and benefits for travel or accommodation (outside of a hospital)
  • Includes cover for medically necessary breast surgery, brain and nervous system, insulin pumps, skin and sleep studies.
  • Restricted cover for hospital psychiatric services.
  • Two month waiting period for palliative care, rehabilitation and hospital psychiatric treatments, even if pre-existing 12 months for other pre-existing conditions two months for all other treatments
  • Extras policy includes cover for a variety of treatments such as speech therapy, blood glucose monitors, podiatry, optical, orthodontics and general and major dental.
  • Unlimited emergency ambulance cover with a waiting period of 1 day.
AIA Health InsuranceSilver Plus Hospital Advantage 750 and Lite Extras
  • This policy exempts you from paying the Medicare Levy Surcharge.
  • This policy provides accident cover and benefits for travel or accommodation (outside of a hospital)
  • Cover includes back, neck and spine, pain management, heart and vascular system, hernia and appendix, male reproductive system and sleep studies.
  • Two months waiting period for palliative care, rehabilitation and hospital psychiatric treatments, even if pre-existing 12 months for other pre-existing conditions two months for all other treatments
  • Extras cover for general dental, optical, physiotherapy, dietetics/dietary advice and health management/healthy lifestyle.
  • Unlimited emergency ambulance cover with a waiting period of 1 day.

Source: privatehealth.gov.au. The above information was based on Combined Hospital, and Extras cover for two adults with dependents, living in NSW (March 2020).

How to choose a family health insurance plan?

When looking for the best family cover health insurance, you should remember that every family is different. Therefore, you may want to look for a health insurance company that will best suit your requirements, and family structure or that will allow you to create your policy. To do this, you can combine a range of Hospital and Extras policies to cater for your unique situation. Things you may want to take into consideration when creating your family plan include:

  • Your family structure, for example, if you are starting a family, have a growing family, are a single parent, or an established family.
  • How many family members you want to be covered.
  • What you can afford.
  • The age of each person in your family.
  • Specific health care needs of each family member.
  • Whether any of you have pre-existing medical conditions.
  • If and when you’re planning to get pregnant.
  • Your family’s overall lifestyle. For example, whether your kids participate in sports.

How much does family health insurance cost per month?

The average monthly premium you can expect to pay for family health cover in Australia is between $222 up to $970, depending on the Hospital policy (Gold, Silver, Bronze or Basic) you combine with your chosen Extras plan (Top, Medium or Basic). Likewise, the higher your choice of Hospital excess, the lower your premium will generally be.

Frequently asked questions and answers.

  • How do you add a family member to your health insurance?

    Your children can generally remain on your family policy until they’re considered adults, typically age 18. However, if your child is between the ages of 21 and 25, they can usually stay covered when studying full-time and are unmarried or if they’re still financially dependent and under the age of 21 and unmarried.
  • What is the best health insurance for military families?

    The Defence Health Fund offers ADF personnel private health insurance. They have 3 Hospital and 3 Extras policies to choose from as well as 2 ADF specific pre-packaged options that combine a range of Hospital and Extras into one policy.
  • Can you put non-family members on your health insurance?

    Generally, you’ll only be able to add family members to your health insurance. You do, however, have the option to add your de facto spouse to your private health insurance. A de facto relationship is made valid when a couple lives together for two years without any separation.
  • What is the average cost of health insurance for a family of 4?

    Many health funds in Australia will allow you to add children to your health insurance policy free of charge. So, you’ll essentially pay between $200 and $1,000 (depending on the level of Hospital and Extras chosen) for a family policy regardless of how many children you have.
  • Can you get ambulance insurance for your family?

    If you don’t live in Queensland or Tasmania, you generally won’t receive free ambulance insurance from your government. So you may want to consider purchasing ambulance cover from a private health insurance company. Emergency ambulance services for the whole family is generally included in both Hospital and Extras plans, although select insurers do sell ambulance only coverage.

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