Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

 

 

Invest

Should younger Australians stay on their parents’ insurance plans

  • June 23 2020
  • Share

Invest

Should younger Australians stay on their parents’ insurance plans

By Cameron Micallef
June 23 2020

With many young Australians being forced to stay at home longer due to financial constraints, an advocacy group has proposed raising the age of dependency for health insurance as a way to save these Australians up to $12,600.

insurance

Should younger Australians stay on their parents’ insurance plans

author image
  • June 23 2020
  • Share

With many young Australians being forced to stay at home longer due to financial constraints, an advocacy group has proposed raising the age of dependency for health insurance as a way to save these Australians up to $12,600.

insurance

In a conversation with nestegg, Members Health Fund Alliance CEO Matthew Koce outlined how younger Australians who are active and starting out in life are concerningly dropping their private health insurance due to the high cost of premiums.

“We know that a number of people who are dependents do drop their cover. That is a period where there is a spike in people leaving private health insurance.

“They are often at university still at 25 years of age. Many people 25 years of age simply do not have the finances for private health insurance, and that is a concern,” Mr Koce said.

Under the Health Fund Alliance’s proposal, which would see the age for family policies raise from 25 to 30, dependent Australians with median single gold hospital treatment policy would save $2,520 per year.

Advertisement
Advertisement

“The legislation is out of date, and no longer reflects modern-day family life or cost-of-living pressures, which many young people struggle to overcome during the formative years of financial independence,” Mr Koce said.

In 2017, 56 per cent of men aged 18 to 29 lived with their parents, up from 47 per cent in 2001. For women, the number increased from 36 per cent to 54 per cent.

“The world is not what it was 30, 20 or even 10 years ago,” Mr Koce said.

“Young Australians now take more time to reach certain milestones – milestones such as completing tertiary study, landing solid employment in their chosen career, affording a first home, marrying or raising a family. These milestones have long defined ‘adulthood’ and provided the foundation for government policy. It’s time to review those dated perceptions when it comes to health cover.”

While highlighting the benefit of a non-discriminatory health policy, effectively younger Australians are being forced to foot the bill for older Australians, despite not being in a place to pay more for insurance.

“In Australia, we have community rating and it’s legislated. It says that everyone pays the same for their private health insurance regardless of their age or health status.”

“So, we have a very fair and non-discriminatory system in Australia. So, young people pay the same as older people, but young people get old,” Mr Koce continued.

Mr Koce also explained that many younger Australians who believe they do not need health insurance might actually need it the most.

“When you’re young, the last thing you want to do is drop private health cover because you’re often most active.

“It is a really important time in your life. If you do an injury on the sporting field or hurt yourself at work, you want access to fast quality care.

He highlighted that a knee reconstruction for the private sector is 24 days, while in the public system for non-emergency emission, it was 109 days.

Mr Koce also stated that it wouldn’t cost the government more money but it could create an economic benefit by getting younger people back to work sooner.

“There is a productivity benefit to having fast access to care. If you’re in pain, you’re not going to be productive in the workforce.

“If you’re mobility challenged, you might not be able to do your job. If you have a physical job and have an issue with your knees or hip, and you’re in a physical job, then there is an economic impact,” Mr Koce concluded.


Did you enjoy this article? You might also be interested in:

 

Should younger Australians stay on their parents’ insurance plans
insurance
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article

About the author

author image

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

more on this topic

more on this topic

From the web

Recommended by Spike Native Network

More articles

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.