Families’ health policies in limbo

Young people aged in their late 20s seeking to join their parents’ health insurance policies have been forced to wait.

Greens senator Rachel Siewert. Picture: Gary Ramage

Young people aged in their late 20s seeking to join their parents’ health insurance policies have been forced to wait after a federal government move to extend the age of dependants allowed on family policies was temporarily thwarted in parliament.

The government promised in last year’s budget to introduce changes by April 1 that would extend the age at which adult children can remain on their parents’ policies from 24 to 31.

The changes were also to have allowed disabled dependants to remain on their parents’ policy long-term.

Many families were keenly awaiting the introduction of the new policies, with health insurers fielding numerous inquiries from young people and their parents wondering why the change had not yet come into effect.

When the bill introducing the legislative change came before the Senate in March, the Greens raised issues concerning the definition of disability. Under the Private Health Insurance Legislation Amendment (Age of Dependants) Bill 2021, the definition of disability included anyone who was a participant in the National Disability Insurance Scheme.

The Greens were concerned that there was a proportion of people with disability who were not participants on the NDIS who would be excluded from continuing on their parents’ health insurance policies.

“There are plenty of people with disability who are not actually on the NDIS,” said Greens senator Rachel Siewert. “That’s our concern. While people have said this is a step in the right ­direction and the insurers can go further, we have concerns that they’re not in fact going to.”

The Greens refused to allow the bill to proceed as a non-controversial bill, delaying its passage. It will next come before the Senate in May when it is likely to pass with the backing of Labor.

Private Health Australia chief executive Rachel David said the industry believed the government had struck the balance right in its definition of disability. “From our perspective, we would like to keep it as simple as possible,” Dr David said. “The risk needs to be calculable and manageable. It can’t be a definition that could potentially encompass the whole population.”

The policy change is designed to encourage younger people to stay in private health insurance, with the aim that on turning 31 they would transition to a policy in their own right.

Dr David said the delay was “not ideal” but health funds were nevertheless planning to introduce new policies in line with the change later this year.

Opposition health spokesman Mark Butler labelled the delay “unfortunate” but said Labor would continue to support the bill to pass the Senate as soon as possible.

“Unfortunately, the government failed to meet their April 1 deadline for the passage of this bill, and now Australians are left waiting for this important reform,” Mr Butler said.

“It’s no surprise families are frustrated after being promised an April 1 start date for extended health insurance coverage for young and disabled dependants,” he added.

A spokesperson for federal Health Minister Greg Hunt said the changes would ultimately provide more affordable and flexible private health cover for families, young people and people with a disability.