Youth Health Discount & The Child Dental Benefits Schedule

Australians aged from 18 to 29 can now be eligible to receive a discount of up to 10% off of private hospital insurance premiums. Not all funds will offer youth discounts, but they now have the option to.

The younger you are when you take out the policy, the more you could save.

What is the youth health insurance discount?

Insurers began offering discounted policies on a voluntary basis from 1 April 2019. If you are an existing policyholder and your health fund starts offering a discount, your discount will be based on your age at the time the discount is introduced. Let's say you took out a policy at the age of 25.

Age-based discount rate

Your insurer introduces an age-based discount on that policy from 1 April 2019, when you are 28 years old. Your discount will be 4%---based on the age you are on the day the discount is introduced. Your discount rate stays in effect until the age of 41, as long as you stay on the same policy. However, insurers can choose to recognise age-based discounts from other insurers; we'll explain more on this soon. From the age of 41, your discount will be gradually phased out at a rate of 2% per year until it hits zero.

The discount can only be offered to those aged 18 or older, and you must be the principal or partner adult on the policy.

Calculating the age-based discount

It's important to note that the discount only applies to hospital cover. If you have combined hospital and extras cover, it will apply to the hospital portion of your cover, not the extras. The discount is only applied to the base premium, before any rebates or Lifetime Health Cover loading is applied.

On couples or family hospital cover? Your discount is based on an average of the adults on the policy. Here's how that works.

How much can I save with the youth discount?

How much you save depends on your age and the cost of your policy. The younger you take out cover, the more you stand to save. Someone who takes out a discounted policy at the age of 25 can secure a 10% discount on premiums for the next 15 years before it starts to reduce.

On a $1500 policy, that's a saving of $150 each year. Multiply $150 by 15 years, and that's a base saving of $2250.

From the age of 41, you'll continue to save on your premiums at a declining rate for the next few years.

Even someone who takes out a discounted policy at the age of 29 can benefit from a 2% saving. On a $1500 policy, that person could save $30 per year, before any other applicable rebates or discounts are factored in.

Why was the discount introduced?

The government wants to encourage Australians to take out private health insurance, because it lightens the load on the public system, Medicare. Private cover comes with many advantages, such as more choice in your treatment, the likelihood of shorter wait times, and benefits for services Medicare doesn't cover, like optical or dental.

The problem is that the cost of health cover can be prohibitive for some, especially younger people. Australians under the age of 30 are taking out less cover than those in other age groups, which is detrimental to all demographics.

The government previously introduced the Lifetime Health Cover loading system, which penalises people who don't take out hospital cover by the age of 31. It works by adding a loading fee to your premium when you do eventually take out cover. The age-based discount is a friendlier way of attracting young people to private cover, by offering a financial incentive to take it out. Not only will you avoid the LHC loading fee, but you'll get a discount too.

Do all health funds offer the discount?

Health funds are not required to offer the age-based youth discount to members. It is entirely voluntary, though it may be advantageous to funds to offer discounted hospital products. The discount could mean that more people take out cover at a younger age, which means more customers for health funds.

Because you can hold on to your discount until the age of 41, it might even mean better member retention. If insurers decide to offer the discount, they must offer it on the same basis to all eligible customers, whether they are new or existing members. At this stage it appears that some big-name funds are gearing up to offer the discount, including ahm, cua, Medibank, and nib. HCF does not plan to offer the discount; however, they will be launching a new product range geared towards young people.

Switching funds with the age-based discount

We mentioned earlier that the discount only carries through to the age of 41 if you stay with the same policy. Your health needs change over time, and so do health insurance prices; that's why switching funds is an important option. Fortunately, health funds have the option of recognising existing age-based discounts for customers who transfer from another fund.

If you find a better deal elsewhere, you can check with the new fund to confirm whether or not they will honour your current discount. For your discount to move with you, you'll need to provide a transfer certificate from your current health fund and switch within a certain time frame.

What is the Child Dental Benefits Schedule?

The CDBS takes care of some, or all, of the cost for basic dental care of your children, if your family is eligible. This initiative is designed to benefit parents with children aged 2-17 years, if your family receives government payments*. 

What Services are covered by the CDBS?

The CDBS assists with the costs of preventative and restorative dental procedures, including some surgeries. Procedures that are covered include:

• Examinations

• X-rays

• Cleaning

• Fissure sealing

• Fillings

• Root canals

• Extractions, and

• Partial dentures.

What procedures aren’t covered by the scheme?

There are several dental procedures you can’t get for your kids under the CDBS program, including orthodontics and cosmetic dental work. For example, if your child has their teeth chipped during a sporting match, any procedure to correct this isn’t covered by the CDBS. There are also a few additional restrictions for basic dental services. The following aren’t covered:

• orthodontic dental work*.

• cosmetic dental work*.

• any dental services in a hospital*.

Before agreeing to any dental procedures for your children, check with your dentist regarding the CDBS restrictions.

Is my child eligible for CDBS?

If your child is eligible for the Child Dental Benefits Schedule (CDBS), you’ll receive a letter from Medicare letting you know this. Usually, your child can get CDBS when:

• they're eligible for Medicare.

• they're between 0 and 17 years old for at least one day that calendar year.

• you (or they) receive an eligible Services Australia payment at least once in that calendar year.

The CDBS is means tested*. This means that you, and your child, must meet certain Centrelink criteria in order to receive any benefits from the CDBS. If you already receive a benefit from Centrelink, then your means testing is likely already available to the CDBS administration. If not, you will need to let Medicare know your family tax benefit status. This is used to decide on your eligibility for the CDBS.

Are Centrelink recipients eligible for the Child Dental Benefits Schedule*?

Broadly speaking, yes though it depends on which Centrelink payments you’re getting.  You can check your eligibility through Medicare online or read more on the Medicare website.

Eligible payments that entitle you to the CDBS include disaster relief assistance, both here and in New Zealand*. 

Can I use private health insurance alongside the Child Dental Benefits Schedule?

Yes, but not for the same dental procedures. There are dental procedures you can’t claim under the CDBS - such as orthodontic work and any dental surgery requiring a hospital stay.  Your private health cover can assist with these costs. It’s possible to use the CDBS benefit for procedures such as:

• dental checkups.

• teeth cleaning.

• dental x-rays.

• fillings.

• fissure sealants.

• extractions.

• root canal.

Depending on your level of health cover, further dental care such as orthodontics, dental cosmetic procedures, and mouthguards can be claimed via your private health cover`. You can find out more about private health insurance and orthodontics in our guide here.

Dental crowns can be an important  consideration if your children play any contact sports. Your private health insurance can cover dental crowns as well as mouthguards, which the CDBS doesn’t. Our guide for health cover that includes dental crowns can be found here.

As noted above, check your health cover to ensure your family has the dental cover they need, and you’re not overpaying for any benefits you can access via the CDBS. To walk through it with an expert, contact a Compare Club advisor today. 

Chris Stanley is the sales & operations manager of health insurance at Compare Club. With extensive experience and expertise, Chris is a trusted leader known for his deep understanding of health insurance markets, policies, and coverage options. As the sales & operations manager of health insurance, Chris leads a team of dedicated professionals committed to helping individuals and families make informed decisions about their health insurance needs.

Meet our health insurance expert, Chris Stanley

Chris's top health insurance tips

• 1

  Australia’s public health system is world-class, but wait times for public hospitals can be long, inconvenient - and leave you living in constant pain while you wait.

• 2

  An appropriate private health insurance policy can speed up your surgery, relieving your pain sooner.

• 3

  Family health cover means your children are covered under the same policy as you.

• 4

  Many health insurance policies come with a 12-month waiting period for pregnancy-related cover, so it’s a good idea to get a family policy organized well before starting your family. This means your child will be covered from birth until at least their early twenties (depending on which health fund you select).