Compare Club has noted a 233% increase in the number of extended policies in September following the recent health insurance rule change, saving Australian families a total of $320,208 by renewing or switching to new cover, it said.
Health insurers Bupa, HCF, Medibank and NIB have increased the upper age limit for dependents on a family health insurance, allowing adult children to rejoin or stay on the family policy until they turn 31 years old. These adult children are not required to be students or live with parents.
According to Compare Club, the average savings for a family of four is around $3,812 a year, but could be as much as $7,396 a year for a family with four children between the ages of 25 and 31.
In fact, the first week of October sold more extended family policies than the whole of July – and it’s only going up from here, the company claimed.
Andrew Davis, chief executive officer of Compare Club, said few families have acted on the change, so the number of policies are likely to increase as more people become aware of this change.
“Both people in their 20s and their parents are very keen on this change, especially as it means the adult children can now get the opportunity to access a level of cover they would not typically be able to afford,” Davis said. “With some fantastic benefits in store, it’s a no-brainer for a lot of adult children and their parents once they become aware of it. We expect enquiries to continue flowing in as more of the smaller health funds enact the change.”
It isn’t just policyholders who benefit from the change, Davis said, as health insurers also have something to gain.
“In many instances, we’ve seen people in their late 20s who’ve dropped their health cover rejoining their parents’ policy and we expect they’d be more likely to stay in the system when they roll off to avoid being hit by Lifetime Health Cover loading which kicks in at age 31,” Davis said.
