Budget 2020: Age limit lifted for adult children

Families will be able to keep their adult children on their health ­insurance policy until they are 31 under private health ­insurance reforms.

Families will be able to keep their adult children on their health ­insurance policy until they are 31 under private health ­insurance reforms aimed at ­addressing the decline of young people taking up and keeping health insurance.

Currently, the age limit for adult children being included on their parents’ policy is 24. It’s ­believed that keeping young people on their parents’ policy until they are 31 will mean they are more likely to then transition to a policy in their own right, ­encouraging continuity of cover.

People with a disability will be able to remain on their family’s health insurance policy under a further measure in this year’s budget. The two reforms will cost $19.5m over four years.

Young people have been dumping their health cover in large numbers over the past five years as premiums have risen.

The move to increase the age that young people can remain on their parents’ policy will be welcomed by private health insurers and consumer groups. The measure was proposed recently by the Australian Medical Association in its blueprint for reforming health insurance.

The government is also moving to make health insurance more attractive by expanding the suite of services that private health can pay for to cover more mental health services and general rehabilitation services, in particular orthopaedics.

This extends the mental health coverage that consumers can now access through their private health insurance which has been widely used by young people.

The government is also pouring an extra $17.1m into enhancing its Medical Cost Finder website, which has been criticised by consumer groups for failing to provide useful information.

The reforms to private health insurance fall a long way short of measures that have been suggested by Private Healthcare Australia and the AMA. Both groups have been calling for the private health insurance rebate, which has been declining in real terms for a number of years, to be increased to make private insurance more attractive.

There have also been calls to increase the penalty applied to people who do not take up private health insurance, with a widespread view that the carrot-and-stick approach of incentives and financial penalties is no longer working effectively.

The declining numbers of people taking up and retaining private health insurance led to a major correction in the budget from what was forecast in the mid-year update.

It’s now expected that the government will have to pay out $710m less than forecast in private health insurance rebates.