Whether you have kids or you're thinking about starting a family, chances are you've got a lot on your plate - and health insurance might not be at the top of your to-do list.

But choosing the right health cover is important, and often you can get better value by opting for a policy that covers the whole family.

If you already have private health cover, it's also worth comparing your options as switching to a new family health policy could save you money.

Got questions? This guide covers how family health insurance works, what to look for when choosing a policy and how you could get better value from your health cover.

Key Points

  • It’s usually cheaper to buy a family health insurance policy rather than separate policies for individual family members.

  • Family health insurance can include hospital cover, extras, or both.

  • As your family’s needs change, switching your health insurance policy could give you better value for money.


What types of health insurance are available to families?

Family health insurance policies are designed to provide cover for you, your partner (if you have one) and your children for treatment received outside the public healthcare system.

There are two main types of family health cover:

Family hospital cover

This covers you and your family if you're treated as a private patient in a public or private hospital.

Gold Cover: Includes joint replacements, cataracts, pregnancy and more.

Silver Cover: Includes reconstructive surgery, dental surgery, heart and more.

Bronze Cover: Includes ear, nose and throat, tonsils, digestive system and more.

Basic Cover: Includes ear, nose and throat, tonsils, digestive system and more.

The tier of cover you choose, along with your specific policy, determines which treatments you're covered for and the cost of your premiums.

Usually higher tiers cover more treatments than lower tiers, but they also tend to be more expensive.

Family extras cover

This provides cover for the cost of non-hospital services that aren't covered by Medicare.

These can include:

  • Dental and orthodontic treatment

  • Optical treatment

  • Physiotherapy

  • Pharmaceutical costs

  • Podiatry

  • Speech therapy

  • Chiropractic treatment

  • Professional diet and nutrition services

  • Pre- and post-natal treatment

Most insurers tend to offer three tiers of extras cover:

  • Basic

  • Medium

  • Top or comprehensive

Extras cover can be especially beneficial if you have children who are likely to need dental treatment, braces or glasses in future, or if you want additional cover for pregnancy-related treatment (which is covered in more detail below).

If you want both hospital and extras cover for your family, you can also choose a combined family health insurance policy.

Some health funds offer the option to mix and match different levels of cover to suit your needs.

For example, you could potentially choose silver hospital cover with top extras, or gold hospital cover with medium extras.

If you're a single parent, and not sure what health cover you need, we've written a guide for all the solo mums and dads out there.


What are the benefits of a family health insurance policy?

There are several potential advantages to choosing a family health insurance policy:

  • Better value for money: It's usually cheaper to take out a policy that covers the whole family rather than having a separate policy for each family member.

  • Cover for your children from birth: If you're planning on starting a family, you can make sure your baby is covered from birth by adding them to a family health insurance policy. Most health insurance policies come with a waiting period, so it's a good idea to get cover well in advance.

  • Avoid paying the Medicare Levy Surcharge: If your household income is over $180,000 a year (or $90,000 for single parents) you can avoid paying the Medicare Levy Surcharge by taking out private health cover.

  • Get money back on common health expenses: If you're going for an annual family dental check-up or your child needs glasses, then you get a percentage of the costs back in rebates. Used smartly these rebates can help offset the overall cost of your family's health insurance and reduce your out-of-pocket expenses.

  • Choose your treatment provider: With private hospital cover you can choose your doctor or surgeon, even if you or your family member is being treated as a private patient in a public hospital.

  • Get a private hospital room: If you or a family member needs to stay in hospital, you could be able to request a private room, depending on your policy.

  • Avoid waiting lists: In 2018-2019, 50% of patients waited at least 41 days for elective surgeries -- such as tonsil removal -- in a public hospital. With private health insurance, you and your family may be able to skip or reduce the wait for elective surgeries by seeking treatment in a private hospital.

How much does family health insurance cost?

The following table gives you a rough idea of the cost of family health insurance from some popular funds.

The actual cost will depend on your health fund, your situation and the level of cover you choose.

What's the best health insurance for my family?

The short answer is it depends on your circumstances.

If, for example, you plan on starting a family soon, you might want to choose a family health insurance policy that includes pregnancy cover and cover for your baby once they're born (remember, there are waiting periods).

If you have older children, it could make sense to choose a policy with extras cover for treatments like orthodontics and optical.

There are a lot of options out there and every family's needs are different.

That's why it makes sense to compare policies from multiple health funds to find one that's right for you.

And whatever your situation, keep in mind most family health insurance policies have a waiting period (ranging from 2 months to 12 months or more) that you'll need to serve before you can make a claim.

So if you think you or a family member might benefit from cover for a particular treatment down the track, it's best to get family health insurance sooner rather than later -- otherwise you could be hit with out-of-pocket costs.

If you already have family cover, you can usually switch to a more competitive equivalent cover with a different insurer without serving any new waiting periods.


What options are available if I've split from my partner or have step-children?

Most family health insurance policies offer flexible cover for different family arrangements including parents, biological children, step-children, adopted children and foster children.

If you're separating from a partner and already have health insurance, your options will depend on your health fund.

Some funds will allow you to stay on the one policy (which could be cheaper than buying separate policies) or remove one person from an existing policy.

Others will require you to take out a new policy if your marital status changes, and most allow a grace period (usually up to 30 days) to take out a new policy before you have to re-serve waiting periods.

Some health funds also offer lower premiums for single parents on family health insurance policies.

This means you could potentially save by switching health funds.

As a single parent, you could also be eligible for a family private health insurance rebate (which is covered in more detail below).

How can I make sure my kids are covered?

The most important thing to look out for is a family health insurance policy.

Often health funds will allow you to 'upgrade' your individual or couples policy to add children, or you can switch to an entirely new family health insurance policy.

Different family policies include different levels of cover, so it's worth shopping around to find a policy that suits your family's needs.

If you're pregnant or planning on starting a family, keep in mind you'll need to add your child to your policy to make sure they're covered from birth.

How long can children remain on a family policy?

In Australia, children can stay on a family health policy until the age of 21 as long as they're dependent, or until the age of 25 if they're dependent and studying full-time.

Some health funds increase premiums once a child is over the age of 18 and not studying full-time.

If this is the case for you, it's worth reviewing your policy and seeing if there's another option that better suits your family's situation and saves you money.

Does family health insurance cover pregnancy and IVF?

Sometimes. Pregnancy cover is typically included as part of a health fund's Gold hospital cover policy, although some insurers offer specific Silver Plus pregnancy packages.

It's also worth noting if psychiatric services are included -- while it's not a pleasant thing to think about, it could be a useful service for parents suffering from postnatal depression.

Both Gold and Silver Plus are generally the most expensive policies, which means you're probably going to need to choose a top-tier family health insurance policy to get cover for pregnancy-related treatment and services such as:

  • Hospital accommodation

  • Theatre/labour ward fees

  • Birth-related intensive care treatment

  • Medication provided in hospital

  • Doctor's fees

Some private health funds also offer additional cover options for treatments such as:

  • In-vitro fertilisation (IVF)

  • Care by a private midwife or doula (pregnancy support professional)

  • Prenatal and postnatal classes

  • Lactation consultancy

  • Pregnancy massage and physiotherapy


What rebates and tax breaks are available for families who hold private health insurance?

If you have family private health insurance, you may be eligible for a rebate on premiums.

If you haven't claimed the rebate through reduced premiums throughout the year, you may be able to claim it as a tax offset.

In these cases, the rebate is calculated as a percentage of the cost of your premiums and claimed as a tax offset by reducing the amount of tax payable on your taxable income.

The rebate amount is calculated based on your age and household income.

Everybody's needs are different and what's right for one family might not be right for another.

But whatever your situation, it's important to review your health cover regularly to make sure you're getting good value for your money as your family grows up.

If you're thinking about switching funds or taking out a new family health insurance policy, you can quickly and easily compare policies by clicking the button below.


This article is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.