'Hidden' health fund regulation to help Aussie families save thousands

'Hidden' health fund regulation to help Aussie families save thousands | Insurance Business Australia

'Hidden' health fund regulation to help Aussie families save thousands

Four in five Australian parents of adult children are still unaware of a significant rule change in their health insurance that will allow their adult children to stay on the family health insurance for longer, according to personal finance marketplace Compare Club.

In 2021, the federal government raised the upper age limit for adult children on a family health insurance policy from 25 to 31 – potentially helping households around $3,000 in their cover.

Compare Club's recent report found that approximately 300,000 Australians aged 25 to 30 with health insurance could be eligible to move back onto their parents' cover, while a similar number aged 21 to 25 may stay on their parents' cover and do not need to worry about taking out health insurance until they are 31 years old.

However, the report revealed that most Australian families remain in the dark about the health fund regulation change, with 82% of parents of adult children unaware of the amendment.

Read more: More Australians flock towards private health insurers

Compare Club explained that families with one child in their late 20s with a low level of hospital cover and extras could save up to $1,010, even with a 25% loading fee that insurers charge. They may even make bigger savings if they have two or more children in their late 20s.

With no additional charge for additional children, households may save:

  • Up to $3,812 per year if they have two children;
  • Up to $5,604 per year if they have three children; and
  • Up to $7,396 per year if they have four children.

“Thanks to this new change to the age limit on cover for dependents coming into force, the average Australian family with two children in their late 20s could be saving between $3,000 to $4,000 a year,” said Compare Club CEO Andrew Davis. “This is a way to help offset the cost of living for all ages – even if the kids are paying for their share, 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 we've seen in recent years that deliver savings for the whole family.”