Four in five Aussie parents of adult children are unaware of a major rule change to their health insurance that allows kids to stay on the family health insurance for longer – a change that could save the household around $3,000 on their cover. Despite the federal govt raising the upper age limit for adult children on a family policy from 25 to 31 in 2021, many health funds have only just rolled out changes leaving families unaware of how they could benefit.
New data from Australia’s personal finance marketplace and advice company, Compare Club, reveals about 300,000 Aussies aged 25-30 who hold health insurance could be eligible to move back onto their parent’s cover, and a similar number aged 21-25 can also stay on their parents cover and not need to worry about taking out their own until they are 31.
How much can Aussie parents save now?
Most Australian families are in the dark about this change, with a recent survey by the company finding 82% of parents of adult children were not aware of the Federal Government’s rule change or the health funds’ plans. Families with one child in their late 20s who holds a low level of hospital cover and extras could save up to $1,010 according to Compare Club’s pricing data, even with the 25% loading fee that insurers will charge.
There are even bigger savings to be made for families who have two or more children in their late 20s. With no additional charge for additional children, the savings really start to add up.
2 children = up to $3,812/year saved
3 children = up to $5,604/year saved
4 children = up to $7,396/year saved
The change, rolling out across all major health funds currently, is also likely to relieve ‘twentysomethings’ of financial pressure as 56% of parents with adult children believe their kids don’t hold health cover because they simply can’t afford it. This change is just what many large middle-age families need to offset inflation and rising cost of living.
Thanks to this change on cover for dependents coming into force, the average Aussie family with two children in their late 20s could be saving between $3,000 to $4,000 a year. This is a way to help offset the cost of living for all ages – even if the kids are paying for their share.
Why is the regulation change good for the whole family?
Mum and Dad get peace of mind that their kids have a high level of cover and the two kids save hundreds. This is one of the best tactics in recent years that deliver savings for the whole family. Not only will this provide ‘peace of mind’ for when things go wrong, but young people will get rebates on important services that they use like dental, physio and glasses.
There are lots of ways to benefit from the changes. Don’t expect a call from your health fund about it any time soon, so if you want to benefit it’s worth comparing funds and their offerings – plenty of health funds are also increasing their premiums in October or November so there’s an opportunity to deal with both issues at the same time and save even more.
Many parents often hold a higher level of hospital and extras cover than their adult children. This means that young, single Australians could get access to a higher level of rebates at the dentist and physio than they would usually be able to afford, as well as being able to access items such as psychology and pregnancy that generally sit in higher tier policies.
Compare Club’s data suggests that a 25-year-old would be paying upwards of $2,600 a year for a combined Silver Hospital and mid-level extras policy. With savings to be made to offset imminent rate rises, and great benefits in store, you’ll be glad you had this conversation.