Private health insurance for young adults
Expert tips for choosing the best private health cover for young adults
Our health insurance expert, Steven Spicer, offers some tips on searching for the right cover for your health needs.
Steven Spicer
Executive General Manager – Health, Life & Energy
Consider what inclusions and perks you’ll need
Knowing what inclusions you’ll likely need is a crucial part of selecting the right level of cover for you. Age and lifestyle can significantly impact this; for example, a young person in good health isn’t likely to need a hip replacement, so having joint replacement cover in your policy might not be a priority. However, if you play a lot of sport, you might want to consider the benefits of an extras policy with physiotherapy cover.
Check if waiting periods apply
Whenever you take out a new health insurance policy, you’ll typically need to serve waiting periods before you can make a claim on some services. Waiting periods can vary depending on the inclusion or clinical category but typically range from 2 to 12 months. Also, keep in mind that waiting periods for pre-existing conditions for most services are extended to 12 months. Always check your policy brochure or fund’s website for details before claiming.
You can adapt your policy
As you age, your health needs will change. The good news is you’re not locked into the policy you choose now for the rest of your life. For now, you may not need pregnancy cover, but in a few years, you may decide you want children and upgrade your policy. Once you’ve finished having kids, you could reduce your level of cover again to save on premiums. This is just one example of how you may adapt your health insurance cover throughout your life to meet your changing needs.
Benefits of health insurance for young people
If you’re young and healthy, you may wonder if you really need health insurance. However, there are plenty of benefits to taking out private health insurance while you’re young. For starters, life can be unpredictable and should you need elective surgery or treatment, it may come with high medical costs. Having hospital cover provides peace of mind that you’ll have cover should you need hospital treatment. You could also potentially save money on your premiums through age based discounts and avoiding the Medicare Levy Surcharge and LHC loading.
But private health insurance isn’t just for unexpected health issues. Your health insurance extras policy can potentially cover services for your general well-being, including dental check-ups and physiotherapy.
Private hospital cover
Private hospital insurance covers in-hospital treatments and procedures, including elective surgeries. It helps cover the cost of being a private patient in either a private hospital or a public hospital. There are four different levels of hospital cover: Basic, Bronze, Silver and Gold. Choosing a level of cover for you will come down to individual factors, including your health status and medical history, your family history, lifestyle factors and age and gender.
While you can’t predict everything that will happen, considering the above factors will give you an idea of the appropriate level that you can search for.
Extra cover
Extras cover is for out-patient health services which aren’t covered by Medicare, such as dental and physiotherapy. In some areas, Medicare and private health insurance will be complimentary. For example, Medicare will cover the cost of eye tests, while your extras insurance can cover the cost of prescription glasses or lenses.
Extras cover can help young adults with the following services:
- Optometry: If you need prescription glasses or contact lenses, an extras policy with optical cover can help cover these costs.
- Physiotherapy: Whether you’re an active person or have a history of muscle pain, an extras policy with physiotherapy can pay benefits towards your treatment costs.
- Dental: Depending on your choice of inclusions, you can claim for some of the costs involved with a range of dental services including dental check-ups, fillings, root canals and braces.
- Mental health: Depending on your policy, you can receive cover for in-hospital treatment for mental illness or out-of-hospital services such as counselling, psychologists and mental health social workers.
Unlike hospital cover, extras cover doesn’t have government-mandated levels of cover. Instead, levels of extras cover will be decided by the health fund, making it even more important to check policy documents and compare your options.
Can a young adult be covered by their parents’ family policy?
Family and single-parent policies can potentially cover child dependants up to the age of 31.1 This, however, will depend on the provider and a variety of factors, such as whether you’re studying, in a de-facto relationship, married or employed full-time.
There are six types of dependants which are:1
- Dependant child (0-17 with no partner)
- Dependant student (18-31 with no partner and receiving full-time education as defined by the insurer)
- Dependant non-student (18-31 years old with no partner who doesn’t study)
- Conditional dependant non-student (a dependant non-student with their own extras cover policy and the same insurer covering them for hospital cover)
- Non-classified dependant person (18-24 years old with no partner and doesn’t fall under the insurer’s rules of dependant student or non-student)
- Dependant with a disability (18 years old or over, can have a partner and is classified as a ‘person with a disability’ by the insurer’s rules).
Your insurer will have rules of eligibility for each dependent type they cover. You’ll need to meet these requirements to be covered by your parents’ health insurance policy. To find out more, check the product documents for your parents’ policy.
Health insurance costs for young adults in Australia
Everyone’s private health insurance needs are different, and premiums can vary significantly because of this. Some of the key factors that will influence your total costs include:
- Type of private health insurance you’re purchasing
- Level of cover or the inclusions you have
- Where in Australia you live
- Your choice of insurance provider
- Your policy’s annual limits
- At what age you first purchase hospital insurance.
Will Medicare cover my medical costs?
Medicare will partially or fully cover:
- Hospital treatment in a public hospital as a public patient
- Tests, imaging and scans
- GP visits
- Prescription medicines which are listed on the Pharmaceutical Benefits Scheme (PBS).
While Medicare is an invaluable service, it won’t cover everything. Health services like dental, optical and physiotherapy are rarely covered by Medicare, meaning if you’re uninsured, you’ll have to pay the entire cost out-of-pocket. The public system can also have a long waiting list for some elective surgeries, due to high demand.
Age-based discounts
In 2019, the Australian Government introduced an age-based discount to encourage younger people to take out health insurance to help reduce demand on the public healthcare system. This is available to Australians aged 18 to 29 with eligible hospital cover from participating health funds. You’ll retain your ABD until you reach 41, at which point it will be phased out.
| Discount | Age* | Discount on a $1,500 (per year) hospital policy |
|---|---|---|
| 10% | 18-25 | $150 |
| 8% | 26 | $120 |
| 6% | 27 | $90 |
| 4% | 28 | $60 |
| 2% | 29 | $30 |
| 0% | 30 | $0 |
|
Source: Private Health Insurance Ombudsman – Age-based Discount. Accessed July 2025. *Age when you first purchase a hospital policy offering discounts. |
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Lifetime Health Cover loading
The Lifetime Health Cover (LHC) loading increases your health insurance premiums by 2% for every year after the age of 30 you wait to take out hospital cover. The purpose of this government initiative is to encourage Australians to take out and maintain private hospital cover at an earlier stage in life.
Note that LHC loading applies only to hospital cover and not extras-only policies. LHC loading will be removed once you’ve held eligible hospital cover for 10 continuous years. The table below shows the amount of LHC loading you can expect, depending on the age at which you first take out hospital cover.
| Age | LHC loading (%) |
|---|---|
| 31 | 2% |
| 40 | 20% |
| 50 | 40% |
| 60 | 60% |
| 65 | 70% (the cap) |
Medicare Levy Surcharge
If you’re earning over a certain income threshold, you’ll need to have a valid hospital cover policy to avoid having to pay the Medicare Levy Surcharge (MLS). High-income earners who don’t have hospital cover may have to pay a surcharge of 1%, 1.25% or 2% of their annual taxable income.
The table below shows the MLS rate that higher-income individuals without eligible hospital cover will have to pay.
| Medicare Levy Surcharge – Tax Brackets (all ages) | ||||
|---|---|---|---|---|
| Surcharge | 0% | 1% | 1.25% | 1.5% |
| Single income thresholds |
$101,000 or less ($0 payable) |
$101,001 – $118,000 (~$1,010 – $1,180 payable) |
$118,001 – $158,000 (~$1,475 – $1,975 payable) |
$158,001+ ($2,370+ payable) |
| Family income thresholds^ |
$202,000 or less ($0 payable) |
$202,001 – $236,000 (~$2,020 – $2,360 payable) |
$236,001 – $316,000 ($2,950 – $3,950 payable) |
$316,001+ (~$4,740+ payable) |
|
Retrieved from the Australian Taxation Office | Information current from 1 July 2025. Dollar amounts payable are rounded up. ^For families with children, thresholds increase by $1,500 for each child after the first. Families include couples, de facto couples, and single parents. |
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Some things to keep in mind include:
- Standalone extras cover won’t help you avoid MLS. You need to have hospital cover either in a standalone or combined policy.
- The policy needs to be provided by an insurer registered in Australia to be valid.
- You’ll need to hold your hospital cover for the entire financial year to avoid MLS.
Meet our health insurance expert, Steven Spicer
As the Executive General Manager of Health, Life and Energy, Steven Spicer is a strong believer in the benefits of private cover and knows just how valuable the peace of mind that comes with cover can be. He is passionate about demystifying the health insurance industry and advocates for the benefits of comparison when it comes to saving money on your premiums.
1 Australian Government Department of Health – Private Health Insurance – increasing the age of dependants – questions and answers. Accessed July 2025.
2 Private Health Insurance Ombudsman. Accessed July 2025.