Oh private health insurance – how are you enjoying your long term stint on my ‘to do’ list?

It’s up there with cleaning the shower, paying car registration and watching ‘800 Words’ in the ‘things young people hate’ burn book.

Either from lack of understanding, an overly optimistic outlook for their future state of health, or simply not feeling able to afford it, young people are the least engaged with private healthcare – despite having access to the cheapest policies. For some reason, we would rather buy acai bowls and bee pollen than private health insurance. We’re a funny bunch.

But what if I told you that now is the best time to finally get private health insurance?

There are new government regulations coming into effect from April 1st, and believe it or not, it means discounts for young people on hospital cover. Yep. Money off, cash in your pocket, a lower fee just for being an under 30 millennial badass.

*does solo happy dance*

I know, it’s almost as OMG-worthy as a Married At First Sight commitment ceremony.

What is the Young Person’s Health Insurance Discount?

The new discounts are designed to encourage more young people to take out a health insurance policy. The younger you are when you take out your policy, the bigger discount you get. It’s in your interest to score the biggest discount you can, too, because if you stay on the same policy, you keep that discount rate until you’re 41.

Yes – FORTY ONE. I know it’s hard to picture yourself at that age right now. You could be a soccer mom who does the school run in her activewear. Or a pant-suit-wearing business mogul. Or a Wiggles impersonator. The world is your oyster.

But no matter where you’re at by the time you’re 41, you’ll still be lapping up your age-based health insurance discount. After your 41st birthday, your discount is phased out at 2% each year, until you’re released to the world of discount-less health insurance. Womp womp.

How Much is The Young Person’s Health Insurance Discount

The young person’s health insurance discount can be up to 10%, and applies to hospital cover only – not extras cover. I explain the difference between the two in my Millennial’s Guide to Health Insurance.

Now, it’s important to note that health insurers don’t have to offer this as it’s optional. I can’t speak on behalf of all insurers, but I do know that Bupa will be offering the full allowable discount to Australians aged 18-29 to their existing and new members. Here are the discounts by age:

If you’re an ahead-of-the-game superhero who values their health and makes really really grown up money choices (aka an existing policy holder), you’re eligible for the discount that relates to the age you are on the date your insurer introduces the new discounts. So, if you’re 27 on the date your insurer introduces age-based discounts, you’re eligible for a product with a 6% discount.

How to Save Money on Health Insurance Under 30

If you’re currently under 30, now is the best time to take out private health cover, as the earlier you do it, the bigger discount you get. And, don’t forget, you carry that discount until you’re 41.

If you’re thinking “wellllll, that’s all very interesting but I’d probably rather spend my cash money on kombucha and trips to Bali”, think of it like this: the younger you are, the bigger your discount, the longer you’ve got before turning 41, and therefore the more years you enjoy discounted health cover. AND, the more years you enjoy the discount after 41, as it reduces by 2% each year until it reaches 0. If you’re still at 10% at age 41, you’ve got 5 more years until it reaches 0%. If you’re only on a 4% discount rate, you’ve only got two years worth of diminishing discounts until it reaches zero.

Ok, maths lesson over.

What Else is Changing as Part of the Private Health Insurance Reforms?

Aside from these tasty discounts, there are more private health insurance changes coming in 2019. Certain natural therapies will no longer be included on extras policies, Australians in rural areas will enjoy improved access to healthcare and may be eligible for a travel benefit, mental healthcare will be more accessible to policy holders, and options will come into play that allow you to reduce your premiums by increasing your hospital excess.

Phew! That’s a lot of information. Bupa explains everything you need to know about how the reforms will affect you here, so grab yourself a cuppa and get clued up on what’s changing in health insurance.

This post was kindly sponsored by Bupa, to help young people understand health insurance in more detail.