PHI 49/10

This circular issued by the Private Health Insurance Branch contains information regarding amendments to Lifetime Health Cover Legislation

Page last updated: 03 August 2010

PDF Printable version of 49/10 (PDF 27 KB)

3 August 2010

Amendments to Lifetime Health Cover Legislation

On 28 June 2010 the Health Legislation Amendment (Australian Community Pharmacy Authority and Private Health Insurance) Act 2010 received Royal Assent. This Act amends the Private Health Insurance Act 2007 (the Act) relating to Lifetime Health Cover (LHC). The amendments only affect people whose LHC base day is on or after 1 July 2010.

The amendments address anomalies in the Act which allowed some migrants access to a longer period to take out private health insurance before incurring a LHC loading. The amendments ensure the LHC provisions are consistent for all new migrants to Australia who are eligible for full Medicare benefits.

Lifetime health cover is an age related financial loading that is applied to private health insurance hospital cover premiums. With effect from 1 July 2010, all migrants who enter Australia after the 1 July following their 31st birthday have a 12 month period to take out private health insurance hospital cover, should they wish to avoid an LHC loading. This period is calculated from the date when they register for full Medicare benefits (their ‘Medicare eligibility day’).

The most notable changes to the legislation are, firstly, that the whole of section 34-25, which is the section of the Act that prescribes when a person’s LHC base day falls, has been repealed and replaced. The new section 34-25 came into effect from 1 July 2010. The new section only affects those with a LHC base day that is on or after this date. For those people, their LHC base day is the later of the 1 July after they turn 31; or if they were overseas on that day, the first anniversary of their first entry or first return to Australia; or if they were not an Australian citizen on their Medicare eligibility day, the first anniversary of that day.


Secondly, section 37-5 has been amended. Previously, the section deemed that any person who turned 31 before 1 July 2000 and was overseas on that date, had hospital cover on their LHC base day. This no longer applies to people who were not an Australian citizen or Australian resident on 1 July 2000 and whose first entry in Australia is on or after 1 July 2010.

The amendments ensure that all non-Australian citizens arriving on or after 1 July 2010 (including those who arrive in Australia on a permanent residence visa) have a ‘lifetime health cover base day’ of the later of the 1 July following their 31st birthday or the first anniversary of their ‘Medicare eligibility day’.

Schedule 2 of the Health Legislation Amendment Health Legislation Amendment (Australian Community Pharmacy Authority and Private Health Insurance) Act 2010, (PDF 13 KB) which includes all the amendments to the Private Health Insurance Act


If you require further information please telephone: (02) 6289 9853/24 hr answering machine or email the enquiry to PrivateHealth@health.gov.au
Internet: http://www.health.gov.au/internet/main/publishing.nsf/Content/health-phicirculars2010-index1
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