Should you be able to stay on your parents' health cover till 30?


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The Bank of Mum and Dad is often only discussed in terms of what it can do for its children looking to buy a home. In fact, Mozo research repeatedly finds the Bank of Mum and Dad to be the fifth largest home lender in Australia.

But this bank's local branch managers will tell you their credit lines run much deeper than a home loan or deposit: education, a car, a wedding, sport or other recreational activities are commonly funded in some way by the Bank of Mum and Dad.

Arguably this bank is the most sustainable in our nation's history. It runs without the need to meet capital requirements of an industry regulator and, by all accounts, is flexible in its approach and has a high customer satisfaction rating.

bank of mum and dad health insurance 30

It's no surprise, then, that 27 private health insurers are lobbying the federal government to create a rule that allows children to lean on the Bank of Mum and Dad a little more and to stay on their parent's private hospital policy until age 30.

Data from the financial regulator APRA tells us that Australians aged between 25 and 34 are dropping their health cover in the tens of thousands. More than 20,000 health fund members in this age bracket cancelled their private hospital cover in the first three months of 2020 - and it was a similar story for the same period in 2019.

They're dropping the cover mainly because they can't afford it, according to research from comparison website Compare the Market. It shows more than a third (35%) of Aussies under 30 don't have private health cover because it's too expensive.

If you are removed from your family's health policy, you can save money in the short term by not having private insurance. However, if you take out cover later in life, a premium will be applied on your new policy from the year you turn 31. And this decision could leave you thousands of dollars out of pocket.

So what does the Bank of Mum and Dad think about it?

According to Compare the Market's June survey of 437 parents with a family health insurance policy, the proposed change would see three in four (78%) parents keep their children on the policy up to age 30. This means the Bank of Mum and Dad is prepared to extend its funding for a little longer and its biggest customers will likely be able to purchase private health insurance when they
can best afford it.

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Darren Snyder was the managing editor of Money magazine from March 2019 to November 2020. Prior to that he was editor of Financial Standard.
Stuart Rothemund
September 16, 2020 7.50pm

Both of my now adult children are no longer covered under our health cover which is top cover provided by HCF. Our premiums remain the same even with 2 less people being covered. Neither of my kids have taken up private health insurance as one is an apprentice and the other is still a uni student with part time work so can't afford the cover.

Jodie Harrison
September 17, 2020 10.33am

You mention 'that 27 private health insurers are lobbying the federal government ?', those funds are part of the Members Health Fund Alliance and are all not-for-profit or members-owned insurers. That means they put people's health before profits.

Raising the age limit on parents' policies would save younger people thousands of dollars a year, especially during a stage in life when cost-of-living pressure start to bite.

The median single Gold hospital treatment policy costs $2,520 per year before Government rebates. Over the course of five years, that equates to approximately $12,600 saved.

The world is not what it was 10, 20 or even 30 years ago. It's time to review those dated perceptions when it comes to health cover. But having more young people covered could also take even more pressure off the public health system,

Jan McMinn
March 10, 2021 2.05pm

We are currently with defence health and have 1 child on NDIS who is 27 and has no health fund as he cannot afford it as he is on job seeker. We have another son who is about to turn 25 who works as a casual so he never knows how much he is going to earn. Which funds are extending the age limits to 30 and covering disabled people?

Suzanne Nicholson
April 8, 2021 5.34pm

We used to have 5 people on the same HIF premium, now only 3 people and it still costs the same amount (although increases every year). Our daughter just turned 25 and got kicked off our cover, although she is still studying (in another state - therefore having to work just to get by), so no way can afford private health cover. We can hardly afford our health cover, let alone having to take out another separate ins for our daughter. They seriously need to look at the age cut off. Premiums are getting ridiculous to afford. $$$

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