Private health insurance is a must-have for many Australian families of all ages and sizes. Not only can private health insurance help your family save money on health care, it can reduce your tax liability. While these factors are important,…
Types of Family Health Insurance
Family health insurance is usually packaged to combine hospital, extras, and ambulance cover. Let’s look at each of these cover types in more detail.
Hospital cover takes care of costs incurred from treatments you receive in hospital, such as theatre and accommodation costs, along with doctor or surgeon fees. What sets hospital cover apart from Medicare is the ability to choose your own doctor and, depending on location, your hospital.
With hospital cover, you can be treated as a private patient in a private or public hospital, which can mean skipping waiting lists for surgical procedures and even accessing a private room for you and your family.
Extras cover is critical for families, especially those with young children. Also called general or ancillary cover, this cover lets you claim for visits to the dentist, optometrist, chiropractor, psychologist, physio, massage therapist and more. Some policies may even include extra features, such as no excess for kids or money back on orthodontics.
Be aware that waiting periods often apply to extras, so read the terms and conditions of your policy carefully.
Unless you live in Queensland or Tasmania, where ambulance services are free, check your policy details about ambulance cover. Emergency ambulance services are usually included in packaged family insurance, but it pays to be sure. Ambulance services don’t come cheap, and you never know when you might need them.
Levels of Family Health Insurance
Insurers tend to offer several levels of family cover, so you can identify a policy that fits your family. The more comprehensive your cover, the higher your premium tends to be, but it’s worth considering your needs and expectations. It may turn out that a higher level of cover offers you the most value.
Family insurance can be catered to match your family’s stage. For example, a family with young children will have different needs than a family with teenage children. Compare that to a couple who is just starting to think about pregnancy, and you’ll see how quickly the options can multiply.
It’s a good idea to review your family policy annually or as your needs change, to be sure that it’s still the right choice.
Waiting Periods and Portability Laws
When you buy health insurance for the first time or upgrade to a higher level of cover, waiting periods are likely to apply. This is a period of time you must hold the cover before you can make a claim, so it’s important to plan ahead. Waiting periods are especially pertinent when it comes to pregnancy, but we’ll cover that in more detail later on.
The government sets waiting periods on hospital cover, while individual insurers are free to set waiting periods on extras cover. Insurer-set waiting periods can range from 2 to 12 months or even longer, depending on the services and fund rules.
|Hospital Cover Waiting Periods||
Portability laws are in place to protect consumers, so you are free to switch funds without repeating any waiting periods on an equal or lesser level of hospital cover. If you upgrade your cover, you will still have to serve a waiting period for the new features.
Portability laws do not apply to extras cover, though some insurers may consider recognising waiting periods already served.
Many mums-to-be find that health insurance makes pregnancy a more pleasant experience, from more flexible appointment times to the comfort of seeing the same doctor throughout your pregnancy. Depending on your policy, you may be able to give birth in a private room.
The waiting period for pregnancy cover is 12 months, which means you need to lock in your health insurance before you get pregnant. The waiting period should be satisfied before your baby is born; however, some funds will still cover a premature birth as long as the due date falls after the 12-month period.
As long as you’re on a family policy when the baby is born, he or she should be covered immediately. Check the conditions of your policy to be sure that there are no gaps in coverage for your newest family members.
Family Health Insurance and Age Limits
Children can stay on their parents’ family policy until they are 21. Full-time students can continue under the family policy until their 25th birthday, when they’ll need to find their own policy. Children aged 21 to 25 who are not full-time students are sometimes able to stay on the family policy, but additional fees may apply.
Family Health Insurance and Your Tax Bill
Having private health insurance can help you avoid a hefty tax bill. Here’s how:
- Private Health Insurance Rebate: An income-tested rebate on your private health insurance premium, applied directly to the premium or to your annual tax bill.
- Medicare Levy Surcharge (MLS): An income-tested surcharge of 1 to 1.5% of income that applies to singles and families without eligible hospital cover.
Although it doesn’t affect your tax bill, it’s worth noting the Lifetime Health Cover (LHC) Loading. Don’t have hospital cover by 1 July following your 31st birthday? When you do purchase it, a 2% loading will be added to your premium for every year that you are over 31. Buying health cover at a younger age can help keep the loading fee at bay.
Comparing Family Health Insurance
Ready to shop for health insurance for your family? Whatever stage your family is in, you can save time and money by comparing policies before you buy. Competition in the market means changing prices, and insurers offer different incentives throughout the year. Shopping around is a great way to find a deal on the features that matter to your family.