Health insurance for young adults

Do young adults need health insurance?

Young people in their 20s or 30s don't necessarily need health insurance, but there's a lot of value to come from it depending on your circumstances. Broadly speaking, these are the times when you might want to consider private health insurance as a young person.

You're earning good money: Once you earn over $100k or so (including superannuation) you'll be hit with the Medicare Levy Surcharge (MLS) at tax time. That's an extra 1% to 1.5% tax on everything you earn, if you don't have hospital cover. This is engineering such that the cost of a basic or bronze policy is about the same as the tax impact. Remember this includes super, so the tax kicks in once you're earning about $90k before tax, not including super.

You're turning 30: Once you turn 31, you'll start racking up the Lifetime Health Cover loading (LHC). For every year you don't have a hosptial policy, the cost of health insurance when you eventually get it will increase by 2% per year. For example, if you don't get health insurance until you turn 40, it'll cost an extra 20%. Note that this extra loading will be reset after you hold hosptial cover for 10 years, so it's not the end of the world.

You want ambulance cover: This one applies to everyone - Medicare won't pay your ambulance bills, which can cost from $500 to $1000 for a typical call out, or much more for anything more complex. If you live in Tasmania or Queenslander the state government will help you out a bit, but everyone else will pay out of pocket without either a subscription or an ambulance only policy. Ambulance is also covered on most extras and hosptial policies, so you probably won't need standalone ambulance cover if you have private health insurance already.

You use a lot of out-of-hospital services: Extras cover helps you pay for medical services outside of hospital like physio, dental and optical. Young people use these a tonne, and extras cover can absolutely pay for itself if you make enough claims each year.

You want private hospital insurance: Sounds strange, but yeah, if you want the peace of mind that private hospital insurance offers, it's worth it no matter what age you are. While Medicare will keep you alive, the waiting times for surgery can be pretty long, leaving you untreated for months or years. Private health insurance can get you treatment much faster when you need it.

Finder survey: How many Australians of different ages have health insurance?

Pros and cons of health insurance for young people

Pros

• Hospital insurance is usually cheap for young people and you get a government discount.
• Extras insurance can help you access services like optical, dental and physiotherapy for less.
• It's peace of mind knowing that if something unexpected does happen, you'll be able to access care in a private hospital at a lower cost.
• If you earn over $97k or are over 30 years old,hospital health insurance will help you avoid the MLS and LHC.

Cons

• Medicare will cover the cost of most medically necessary hospital care.
• If you don't need coverage in a private hospital then it's an added expense..
• Treatments like optical, dental and physio can be paid for our-of-pocket - depending on your needs, this may be more affordable.
• Your parents' family health insurance may be able to cover you until you turn 25, for less than the cost of your own policy.

Different types of health insurance for young folks

• Which hospital cover tier is best for young people?

  Hospital health insurance comes in 4 tiers in Australia: basic, bronze, silver and gold. Each tier covers a higher number of treatments in a private hospital and generally have higher premiums. Young adults will have a variety of needs, so it's hard to say which tier you should go for. For example, bronze policies may cover most accidents or illnesses commonly experienced by young adults, but pregnancy and childbirth is only covered until silver plus and gold policies. Check out our page on hospital health insurance tiers to learn more.

• When am I no longer covered by my parents' health insurance?

  There are a few different situations where you need to leave your family's policy. These can include:

  • When you turn 25. This is usually when you're no longer allowed to be listed as a dependant on your parents' health insurance policy.
  • When you get a full-time job. Some insurers won't consider you a dependant anymore when you get a permanent full-time job.
  • When you graduate. If you go to uni or college, you can often stay on your family's policy until you graduate.
  • When you get married. Most insurers outline that in order to be considered dependant, you can't be married.

Written by

Tim Bennett

Insurance expert

A seasoned journalist with over 10 years of experience in news, politics and finance reporting, Tim has previously held roles at the ABC, SBS and Fairfax Media. Tim’s expert insights have been quoted in The Australian, The Daily Telegraph, The Courier Mail and more. He regularly appears on TV and radio, and has been interviewed on 7 News, Sunrise, SBS News, ABC Local, 3AW and 5AA. Tim is passionate about simplifying complex insurance topics for Australian consumers. He holds a Bachelor of Arts (Politics) from Macquarie University and a Tier 1 General Insurance (General Advice) certification, which meets the requirements of ASIC Regulatory Guide 146 (RG146). If you’re interested in a media interview with Tim, please reach out to our PR team at aupr@finder.com. See full bio

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Co-written by

Gary Ross Hunter

Journalist

Gary Ross Hunter has over 6 years of expertise writing about insurance, including life, health, home, and car insurance. Having reviewed hundreds of product disclosure statements and published over 800 articles, he loves simplifying complex insurance topics for everyday readers. Gary has contributed to major outlets like Yahoo Finance, The Sydney Morning Herald, and news.com.au, and holds a Bachelor of Arts (Honours) in English Literature from the University of Glasgow, along with a Tier 2 General Advice certification, ensuring his work adheres to ASIC’s RG146 standards. See full bio

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Gary Ross has written 597 Finder guides across topics including:

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