In early October, the Federal Government announced new reforms designed to overhaul the private health insurance industry. One of the proposed reforms was to make hospital cover more attractive for people in their 20s.
Why? In 2017, 56,000 people under the age of 30 dropped their health insurance, according to Morgan Stanley. A discount will go a long way to endearing hospital cover to these young Aussies.
What is the discount?
On April 2019, health insurers will be able to (but are not obliged to) offer discounts for 18-29 year olds interested in hospital cover. It’ll be calculated at two per cent for every year the customer is aged under 30, but is capped at 10% for 18-25 year olds.
In plain English, here are exact percentage discounts that will be on offer for each age bracket (provided their health fund offers a discount):
| Age when first purchased hospital insurance | Percentage discount offered |
| 18 – 25 years old | 10% |
| 26 years old | 8% |
| 27 years old | 6% |
| 28 years old | 4% |
| 29 years old | 2% |
| 30 years old | 0% |
| Source: Department of Health | |
They enjoy the discount as long as they are insured, although the discount will not apply once they grow older than 40.
So, is the proposed discount a good enough reason to get covered earlier?
Look, a discount is never a good enough reason to buy something if the value isn’t there. No one buys a dress they don’t like just because it is 10% off.
Well, maybe some of us do. (Guilty!)
It’s the same with health insurance. The best reason to buy health insurance is because you think it will add value to your life. We think it will!
Here are three reasons why we think health insurance could be right for you.
No one wants to think about it, but let’s face the facts. At some stage in your life, you’ll wind up in a hospital bed.
“Not me!” we hear you cry.
Well, take a look at how many young Australians ended up in the emergency department in 2015/16, according to the AIHW.
Young Aussies are literally the most accident-prone age group in the country.1
Yes, Medicare will cover you for your treatment in the emergency department in a public, but if you require specialist treatment and/or rehabilitation afterwards, you might have to pay out of your own pocket for certain treatments privately, or end up on a public hospital waiting list.
Did you know: more than a quarter of emergency presentations were not seen within the clinically recommended time? 1
Honestly, we’re not trying to scare the pants off you. The fact of the matter is that we have spoken with too many 20-year-olds who thought they were invincible, who are now looking for hospital cover to avoid waiting lists.
So, if you play sports, if you work in an environment where you are likely to do yourself some damage, or have a chequered family medical history, compare hospital cover to see if a little extra protection is right for you.
The upcoming discount will not apply to extras policies. However, extras cover (or ‘general treatment’ cover) is a fantastic value product in its own right, because it helps you pay for out-of-hospital treatment you’ll often need.
We say “often need” because many people get an extras policy, but never take full advantage of it. To ensure you get value out of your extras, answer the following questions:
If you find yourself answering “yes” to more than one of these questions, you might get value out of extras health insurance. Learn more about extras cover.
Young, healthy Aussies have no place in a hospital. However, as you get older, your health needs change. Many of us want to start a family in the future, or take care of those pesky crooked teeth with some orthodontic work.
You may not be interested (or able to afford) such things now. What about five or ten years from now?
The way these discounts work paints a clear picture: if you take out cover in your twenties, the better off you’ll be when you’re older and need this cover.
Plus, take out and maintain hospital cover early, and you’ll avoid paying LHC loading – an extra cost lumped onto your health insurance premiums if you choose to get covered later in life.
Let’s keep things simple. You are probably well aware of your health needs: whether it’s a bum leg or a ringing ear. If you give us a call, we’ll find you a product that helps care for those needs.
Look after yourself now, pay less later. It’s that simple.
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