A recent Money.com.au survey shows that nearly half of Australian parents pay the full private health insurance premiums for their adult children.
Around 30% of parents report that their adult children contribute partially, while only 22% say adult dependants cover the full cost themselves.
Chris Whitelaw, general manager of health insurance at Money.com.au, said many young Australians continue on their parents’ family cover into their late twenties.
“The Bank of Mum and Dad is paying to keep them insured, which can save young adults money in the short term. The alternative is that they would forfeit cover entirely, as it can be cost-prohibitive for them to take out their own policy if they’re on a low income or just starting their career,” he said.
Whitelaw added that once adult dependants earn a steady income, it is appropriate for them to start contributing to the family plan or consider taking out their own insurance. This also helps avoid the Medicare Levy Surcharge for higher-income earners.
Health funds generally allow adult dependants aged 21 to 31 on family policies, although this typically increases premiums. Dependants who are full-time students and not married or in a de facto relationship may be included at no extra cost.
Money.com.au’s analysis shows that family policies including adult dependants over 21 who are not studying can increase premiums by around 25%.
A policy with children under 21 averages $4,808 per year, while adding adult dependants raises it to $6,016.
Generational patterns also differ. Among Gen Z adults, 29% rely on parents to pay fully, 45% contribute partially, and 27% cover their share entirely. Among Millennials, 26% rely fully on parents, 32% contribute partially, and 42% pay fully themselves.
These trends come as data from Canstar indicates that some private hospital insurance premiums have increased beyond the government’s April 1 average of 3.73%.
Gold-level individual policies rose 13.8%, adding $442 annually, while family policies at the same level increased by $858 on average, reaching $7,207.
Other tiers experienced smaller changes: Bronze and Silver policies grew 1.5% to 5.2%, while Basic plans saw a slight decline.
Premiums also differ by state, with Victoria and Queensland recording higher Gold-level costs, and the Northern Territory and Western Australia lower.
Australians with private hospital insurance submit an average of two claims per year, according to another recent Money.com.au survey.
About 51% made one to two claims, 10% made three to five, and 7% made six or more. Around 31% of policyholders reported never claiming.
Hospital insurance is seen as the most critical coverage for 21% of respondents. For 19% of this group, cost savings from claims are the main factor, highlighting the reliance of many policyholders on hospital coverage for procedures such as elective surgery and overnight admissions.
