Best Health Insurance for Families in Australia: How to Compare Cover and Costs

What family health insurance is (and what it covers)

Family health insurance is a single private health insurance policy designed to cover parents and dependent children together. It can help pay for a range of medical expenses and treatments that sit outside Australia’s public health system, Medicare. While it works in a similar way to singles or couples cover, family policies are structured to suit the needs of households that may have both adult and child healthcare expenses.

Family cover can be particularly relevant because a significant share of policies are held by families. The most recent health insurance statistics indicate that around half of all Hospital policies are family policies. In a survey of more than 1,000 people, 31% of respondents said they were on a family health insurance policy.

The three main types of family health cover

Family health insurance generally comes in three formats:

• Hospital-only cover
• Extras-only cover
• Combined Hospital and Extras cover

A key point for families is that everyone on the policy typically shares the same type and level of cover. You generally can’t “mix and match” different Hospital tiers or different Extras inclusions for each person under one family policy. If you need different cover for different family members, you may need separate policies.

Hospital cover: what it can help pay for

Hospital cover is designed to help with costs when family members are treated as private patients in public or private hospitals. Depending on the policy, it can help with expenses for surgery and related costs during a hospital stay, such as accommodation, transport and meals.

Families can choose a Hospital tier that suits their needs, commonly described as Basic, Bronze, Silver or Gold. With a family Hospital policy, all covered members will be on the same tier, which affects what treatments are included and the level of cover.

If your family wants cover for common childhood procedures such as tonsils, adenoids and grommets, you typically need an appropriate Hospital level, often Bronze or higher. Waiting periods can apply, such as a typical two-month waiting period for tonsillectomy or adenoidectomy procedures, or 12 months for pre-existing conditions.

Extras cover: everyday services and benefit limits

Extras cover helps with out-of-hospital services such as dental, optical and physiotherapy. Inclusions and limits vary based on the level of Extras you choose. Unlike Hospital cover, Extras inclusions can be less standardised, so it’s important to review exactly what is covered and the benefit limits for each service when comparing policies.

Under a family Extras policy, all members generally share the same level of Extras cover and access the same set of benefits. Claim limits may apply per person or as a total family limit for the year (for example, an annual limit of $750 for general dental). Checking how limits are structured can make a meaningful difference to value, especially if multiple family members use the same services.

When family health insurance can become more important

There are several common life stages when families tend to reassess their private health cover:

• Planning a pregnancy or expecting a child: Pregnancy and childbirth benefits are typically linked to higher levels of cover, and there is usually a 12-month waiting period before you can claim for pregnancy and childbirth-related expenses.
• Growing families: A single policy can be easier to manage as you add children, and Extras cover may help with routine dental check-ups.
• Teenage years and early adulthood: Policies may continue to cover children until the typical age limit of 21, or 31 if they are still studying, subject to terms and conditions. This period may also coincide with greater use of optical, chiropractic and orthodontic services.

As noted by Chris Whitelaw, General Manager - Health Insurance at Money.com.au, some children can remain on a parents’ family policy until 31 if they meet conditions such as studying full-time and not being married or in a de facto relationship. Where multiple children qualify, this can reduce costs compared with separate singles policies, although families may choose to have adult children contribute to premiums.

How much family health insurance can cost

The cost of family health insurance can vary widely. As a general guide, family Hospital cover ranges from $174 to $541 per month, and Extras cover is around $124 per month. Your premium depends on factors such as the level of cover, the ages of the family members, and the provider you choose.

Income can also affect premiums due to the availability of the Private Health Insurance Rebate for eligible households. A report from the Private Health Insurance Intermediaries Association (PHIIA) found that the average gross annual premium (GAP) for combined Hospital and Extras family policies sold by its members rose by 1.7% over the past year to $4,890 (around $408 per month).

An illustrative comparison (priced as at 1 December 2025) for a couple aged 35 with two dependent children under 21 in NSW, combined income under $202,000, and an excess of $750, showed monthly combined premiums including the government rebate ranging from:

• $238.23 (Basic Accident Only Hospital & Freedom 60 Extras)
• $238.81 (Hospital Basic Plus & Mid Extras)
• $258.40 (Basic Accident Hospital & Core Extras)
• $258.65 (Accident Only Hospital Basics & Mid Extras Set Benefits)
• $286.04 (Bronze Plus Hospital & Growing Family Extras)
• $288.94 (Core Hospital Bronze Plus & Focus Extras)

These figures are a guide only and may reflect differences in inclusions and coverage levels. Final premiums can vary by insurer, cover selection and location, and policies may not suit every household. Product Disclosure Statements set out what is covered.

Key cost factors: rebates, loading, discounts and tax considerations

Private Health Insurance Rebate: The government rebate reduces premiums for eligible households. For couples and families (including single-parent families), rebate eligibility is based on combined household income (up to an income cap). The rebate can also be influenced by the age of the oldest person on the policy, with higher percentages applying for older age groups. Figures provided include:

• 24.288% (under 65), 28.337% (65–69), 32.385% (70+)
• 16.192% (under 65), 20.240% (65–69), 24.288% (70+)
• 8.095% (under 65), 12.143% (65–69), 16.192% (70+)

Lifetime Health Cover (LHC) loading: If you are over 31 and have never had private health insurance, you may pay an additional cost on top of standard premiums. For couples and families, the loading is calculated as the average of each person’s loading. An example given: if one partner has a 10% loading and the other has 0%, the family loading would be 5%.

Age-based discounts: Some insurers offer an age-based discount if either or both partners are under 30 when taking out cover. The discount is typically 2% for every year under 30, averaged across partners, and remains until age 41 before phasing out.

Medicare Levy Surcharge (MLS): This is not a premium cost, but a potential tax cost if your combined household income exceeds the relevant threshold and you don’t hold the required level of Hospital cover. For the 2025/26 financial year, the family income threshold increases by $1,500 for each dependent child after the first.

Policy settings that can change your premium

Excess: Some insurers allow families to choose a higher excess to reduce premiums. The maximum excess for family policies is typically $1,500 per membership year. A higher excess can lower premiums, but increases out-of-pocket costs when you claim.

Premium increases: Premiums can rise over time, and it is noted that costs often increase on 1 April each year due to inflation or changes in healthcare costs. Comparing policies with an eye on future affordability can be as important as the initial price.

How to compare family policies effectively

• Choose the right Hospital tier: Basic cover may suit some families, but others may need Bronze or higher for specific treatments, including common childhood procedures.
• Check Extras inclusions and limits: Confirm what services are covered and whether limits apply per person or as a shared family cap.
• Understand waiting periods and exclusions: This is especially important for pregnancy, maternity and pre-existing conditions, where waiting periods (often 12 months for pregnancy-related claims) can apply.
• Look for discounts and offers: Some insurers offer discounts for bundling with other policies or for long-term customers, and seasonal promotions may apply.
• Balance premium vs excess: A lower premium may come with a higher excess, so consider what you could afford if a family member needs hospital treatment.

Ultimately, the “best” family health insurance is the policy that matches your family’s likely needs, fits your budget over time, and has clear limits and waiting periods you understand before you sign up.