Skip to Content

Is private health insurance worth it for young Australians?

13 December 2017 - 3:40pm

People between the ages of 20 and 29 are the least likely to hold a health insurance policy for both hospital and general treatment, Australian Prudential Regulation Authority data shows. Plus, over the September quarter, almost 9,000 Australians aged from 25 to 29 dropped their cover (the largest decrease of any age group).

Why are youth dropping their insurance en-masse? And is Private health insurance worth it for young Australians?


Is private health insurance really worth it for young Australians?Is private health insurance really worth it for young Australians?

The value of Private health insurance 

The most recent Australian Psychological Society Stress and Wellbeing report found that financial problems were the most significant source of stress for all Australians. These financial stressors are most pronounced in those below the age of 30 - when buying a first home, starting a career and paying for university are common goals. 

It's no wonder that this group sometimes foregoes private health insurance as a result of these pressures. However, the fact remains that underinsured young Australians may just be the group who would benefit most from a tailored policy.

The right cover allows young people to focus on what's important.

Those who are already covered certainly are - Insured people under the age of 30 were paid 16,000 claims over the value of $10,000 during 2016 alone, Private Healthcare Australia data shows. That means last year 16,000 young people either saved $10,000 in healthcare costs, or considerable time waiting to be processed by the public system. 

Those numbers show the value of private health insurance for young Australians. The right cover allows young people to focus on what's important, without worrying that a medical mishap will completely derail their financial planning. 

The problem with youth health underinsurance

The shortage of low-cost youth customers means that health funds can not cross-subsidise the high costs of insuring Australia's fast growing elderly population. This increases health fund operating costs, which places upward pressure on premiums making insurance more expensive for everyone. 


Government reform has introduced private health insurance discounts for under 30s. Government reform has introduced private health insurance discounts for under 30s.

To reverse this phenomena and encourage more young people to get the health insurance cover they need, the government has introduced reform to offer premium discounts for under 30s. These will come in the form of a 2 per cent discount, building every year of coverage to a maximum of 10 per cent (and dropping off at 40). 

If this reform succeeds in encouraging younger Australians to take up health insurance, and see its value, it should be judged as a success by all. 

If you don't hold a private health insurance policy, whether you're 18 or 58, get in touch with the team here at HICA. Our experienced consultants are experts at tailoring health insurance cover to your exact needs, to make sure you always get the best possible value.