What’s the best age to get health insurance? 

If you’re a young and healthy Australian, do you really need health insurance, since you can get public hospital treatment for free under Medicare? And if you’re an older Australian, is it worth getting health insurance, even though it might cost you more? There’s no best age to get health insurance, but there are lots of reasons why health cover might be the right choice for you at your age and stage of life. Here, we explain how age might affect what you pay for insurance, and how to decide whether it’s right for you. 

Professor Rosalie Viney, health economist at the University of Technology Sydney, says you need to weigh up your budget and consider your odds of needing non-urgent hospital treatment when deciding whether to get health insurance.  

“The decision is an assessment of what you are likely to use, and it’s also an assessment about personal risk and preferences,” she says.  

Do you need health insurance if you’re under 30 and healthy? 

If you’re under the age of 30 and no longer covered by your parents’ health insurance, you might be tossing up whether or not to get your own Hospital Cover, which covers private hospital treatment. On the one hand, it could be smart financially to take out a Hospital Cover policy before the age of 30, as you’ll avoid the Lifetime Health Cover Loading and may be able to get an Age-based Discount (if your insurer offers it). On the other hand, unless you have a chronic health condition or injury, you’re less likely to need hospital treatment than an older person, says Prof Viney. 

“Given that everybody has access to Medicare, Private Health Insurance is really for elective treatments, and those are often for things that young people aren’t that much at risk of.” 

Regardless of your likelihood of hospital treatment, you need to consider your income when weighing up the decision to get Private Health Insurance. If you earn more than $97,000 as a single person or $194,000 combined as a couple, you’ll be penalised with the Medicare Levy Surcharge if you don’t have Hospital Cover, which means paying an extra 1-1.5% tax. For some young Australians, avoiding the Medicare Levy Surcharge is the main reason to take out health cover.  

For non-hospital health costs, you might decide to take out Extras Cover to minimise your dental costs, and if you’ve got an active lifestyle, having subsidised physiotherapy and remedial massage might appeal. But since these policies usually have limits, you need to calculate how much you typically pay for these services in a year, and compare that to the amount of cover, to find out whether it’s good value.  

Do you need health insurance if you’re 30 to 50? 

The main reason many Australians choose to get Hospital Cover in their 30s is for fertility treatment or pregnancy and birth cover, says Prof Viney. And for Australians ages 30 to 50, the decision to get health cover may be so they can avoid waiting lists for non-urgent hospital treatments. At this stage of life, your risk of needing hospital treatment is a little higher than it was when you were younger, she says. Thanks to Medicare, you can still get public hospital treatment without health insurance – but you can’t skip long waiting lists by going private for non-urgent procedures, such as surgery for endometriosis. 

“The problem is that ‘urgency’, as assessed by the health system, might be different from how you feel if you’ve got a debilitating condition that’s really impacting on your quality of life,” she says. “I can speak from personal experience because I had to have a hip replacement, and if I had to wait until the public sector determined that my treatment was urgent, then that could have been a big impact on quality of life.” 

Again, if you’re earning above the Medicare Levy Surcharge threshold, Hospital Cover could be worthwhile financially in middle age.   

Extras Cover is sometimes good value for people aged 30 to 50 who want dentistry and orthodontics cover for their children, or who use a lot of allied health services such as physiotherapy, massage therapy and psychology. 

Do you need health insurance if you’re over the age of 50? 

After the age of 50, your risk of hospital treatment is much higher – which is why the largest age group for both Hospital and Extras treatment claims is Aussies aged 65 to 84 – so having health insurance might pay off. However if you didn’t take out (and continuously maintain) Hospital Cover before the age of 31, you’ll have to pay the Lifetime Health Cover Loading on top of your premium, which is an extra 2% for every year you are older than 31 (capped at 70%). So if you’re 55, for example, you could be paying an extra 48% (2% x 24 years over the age of 31) for Hospital Cover, which means this could be an expensive age to take out Private Health Insurance for the first time. However it could be worthwhile if you need an ambulance, which is not covered by Medicare nor by most state/territory health systems. And health insurance after the age of 50 means you can access faster hospital treatment for conditions such as cataracts, which affect half of people over the age of 50 and often involve a long waiting list (potentially more than a year) for surgery in the public system.  

How much does an ambulance cost where I live?

Extras Cover may be useful after the age of 50 for healthcare services such as podiatry, optical and hearing aids.  

If you decide to get health insurance purely to avoid the Medicare Levy Surcharge, some of the cheapest Hospital policies (particularly at the Basic level) don’t offer much value, Prof Viney says.  

“If you are going to take out Private Health Insurance for tax reasons, then you might want to consider: ‘what would be covered, and what’s the difference in the premium if I go for a slightly higher policy that would cover more of the things that I might possibly need?’ rather than saying: ‘I’m just going to go for the cheapest policy that lowers my tax bill.’” 

Is it worth putting aside money and ‘insuring’ yourself instead? 

Instead of health insurance, you could put aside money for health costs into a separate bank account so it’s available for hospital treatment later if you need it. Prof Viney points out it’s quite difficult to do this, especially if you are focused on saving for a house or paying off a mortgage, and if you need the money sooner rather than later for hospital treatment, you might not have enough saved. It’s a risk you have to weigh up, she says. 

How do I find the best health insurance for my age? 

To find the best value policy for your age, try the healthslips.com.au Calculator. It compares every single policy from every insurer on the market without bias, it’s free to use, and you don’t have to enter any contact details.  

Try the healthslips.com.au Calculator. 

Trudie McConnochie

Writer and Researcher

Knowledge is power – that’s the guiding principle behind everything Trudie writes, and it’s a philosophy she brings to her work at healthslips.com.au. By breaking down complex information into easy-to-understand blogs and stories, she aims to empower Australians to make the best choices and an informed decision around private health insurance.

Trudie understands firsthand some of the complexity of private health insurance having moved to Australia from New Zealand and having to navigate a vastly different public healthcare system and health insurance structure.

Trudie holds a Bachelor of Communication Studies (journalism major) from the Auckland University of Technology.

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