As part of the government’s 2020-21 budget, the age of children to be considered as “dependents” under family health insurance policies has risen.
From April 1 this year, the maximum age of a dependent for a private health policy will be increased to 31.
The reasoning behind this is to give young people more time before facing financial decisions, especially in the wake of one of the hardest youth employment years in recent memory.
Why is the government making this change?
There are several reasons why the age limit is being increased. Data has shown that young people are dropping private health cover at a steady rate over the past five years or so.
Conceivably, by extending the age limit to a time where young people are more likely to have higher paying jobs and be more financially secure, the more likely they are to take out their own policies.
As young people decide to drop private health cover, the remaining age of those who still have the insurance rises.
This, as a result, tends to make premiums go up. So as the government theories in its budget papers, keeping young people covered keeps insurance cheaper overall.
“Allowing dependents to remain on the family policy until the start of Lifetime Health Cover provides them with a clear moment for decision about maintaining their PHI, and increases PHI’s attractiveness to young people,” the government said in its Budget.