Thursday, 25 February 2021
Private Health Insurance Legislation Amendment (Age of Dependants) Bill 2021; Second Reading
That this bill be now read a second time.
The government is continuing its program of reform to private health insurance, which is making private health insurance simpler and more affordable. The most recent premium round process, which delivered the lowest average premium increase in 20 years, demonstrates our success.
Announced in the 2020-21 budget as part of the reform program, from 1 April 2021 the maximum age of dependants for private health insurance policies will able to increase from 24 to 31 years. For the first time, there will also be an opportunity for insurers to offer policies with no age limit for dependants with a disability.
The Private Health Insurance (Complying Product) Rules will include the definition of disability. Our intention is to align this definition with the National Disability Insurance Scheme but allow insurers flexibility to extend coverage to people who do not meet the NDIS eligibility. The commencement date will be stated in the rules.
We welcome the readiness of insurers to offer this expanded coverage to their customers and recognise that they will need some time to communicate with their customers about these changes.
Younger adults will be able to stay on their parents' private health insurance policy for longer at a time, when many young adults may otherwise consider opting out of private health. It will be easier for them to transition from being on their parents' cover to buying their own when Lifetime Health Cover applies at the age of 31. While this reform most obviously benefits the younger adults who will be covered as dependants, their transition to their own adult cover after they turn 31 years of age will over the medium term contribute to making private health insurance more sustainable for everyone.
People with disability will be provided with the flexibility to access more affordable private health insurance without age limits as they can be covered under a family policy at no or low cost—rather than purchase a standalone policy.