Better health and ageing for all Australians

Lifetime health cover

Lifetime Health Cover - How does it affect me?

This page contains information about the effects of Lifetime Health Cover.

In this section:

Private Health Insurance - For Health Professionals

Private Health Insurance - For Consumers

I am an existing health insurer member with only general cover.

General cover does not count towards Lifetime Health Cover. In order to avoid incurring a loading on your premium, you need to take out hospital cover before the 1 July following your 31st birthday.

I am an Australian who was living overseas when Lifetime Health Cover was introduced.

There is a provision under the Lifetime Health Cover rules which allow Australian citizens and the holders of permanent visas who were overseas on 1 July 2000 to take out hospital cover without a loading being applied to their premium. These provisions apply only to people who were aged over 30 on 1 July 2000.

If you meet the criteria for more than one provision, you are able to choose the provision that best suits your needs.

Provision 1: Overseas from 1 January 2000 to 1 July 2000 inclusive

People under this provision:

  • Must have been absent from Australia for the whole period, and cannot have come back to Australia even on a holiday.
  • An eligible person will have a twelve month grace period to take out private hospital cover without incurring a Lifetime Health Cover loading.
  • The twelve month grace period will start from their first return to Australia after 1 July 2000, even if that return was for a short visit.

Provision 2: Overseas on 1 July 2000:

  • You will be taken to have a certified age at entry of 30 and to have held cover for the period of your absence.
  • When you return, you will be subject to normal Lifetime Health Cover period of absence rules.

    ie: you will have 2 years to take out cover without penalty, then 2% penalty will be applied for each 365 days you delay taking out hospital cover.

  • You will be taken to be absent from Australia, even whilst on short term visits up to and including 90 days
  • A period of absence starts from the first day you return to Australia and do not depart within 90 days.

  • eg. If you take out cover on your 95th day after returning, you will have used up 95 days of your period of absence. However, if you return to Australia and leave after 85 days, you have not used up any of your period of absence.

  • The type of proof of absence is determined by the health fund. There are no guidelines, and proof may consist of a letter from an employer, a passport, or in some cases, a statutory declaration.
  • No documents are required from the Department of Health and Ageing.

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I was in Australia on 1 July 2000 but was a resident of another country.

Australians who were residents of another country on 1 July 2000, but were actually in Australia on that date are treated the same as expatriates overseas on 1 July 2000 (Provision 2 above). This provision applies only to people who were aged over 30 on 1 July 2000.

They are:

  • Taken to have certified age at entry at 30.
  • Visits to Australia of up to 90 days do not break the period of absence.
  • When they return to Australia, normal periods of absence rules apply.
  • Funds decide what proof of absence is required
  • No documents required from the Department of Health and Ageing.

I was overseas on my 31st birthday.

Australian citizens and permanent residents who are overseas on their 31st birthday receive a grace period to purchase hospital insurance without incurring a Lifetime Health Cover loading.

This grace period is available for Australian citizens and permanent residents who turn 31 after 1 January 2000, and are overseas on their 31st birthday.

These people do not pay a Lifetime Health Cover loading if they purchase hospital cover by the later of:

  • 23 April 2005; or
  • the first anniversary of the day they return to Australia.

People in this category are able to return to Australia for periods of up to 90 consecutive days, and they are still considered to be overseas.

If you were overseas for the whole period 1 January 2000 to 1 July 2000, then you are covered by a different provision.

I am going overseas. Can I drop my private hospital insurance?

If you are going overseas, there are two ways to avoid paying a loading on your private hospital insurance when you return to Australia.

1: Suspension

You can apply to your fund for a suspension of your private hospital insurance. Periods of suspension may be granted at the discretion of your fund. Your fund decides how long the suspension will be.

For Lifetime Health Cover purposes, periods of suspension count as periods with private hospital insurance. You do not pay a loading for any period you were granted a suspension.

2: Cancellation

If you will be overseas for at least 12 months, you can cancel your private hospital insurance and when you return to Australia you do not have to pay a loading to cover your period overseas.

This is different from suspension because it lasts as long as you are overseas - your fund does not decide how long you can cancel for.

You can return to Australia for visits for up to 90 days at a time and you will still be considered to be overseas.

In addition, you can also access the normal Lifetime Health Cover period of absence, which is 2 years. So when you return to Australia permanently, you have up to 2 years to re-purchase private hospital insurance without incurring a loading.

Warning:

If you have private patient hospital cover and are considering cancelling or suspending your cover while you are overseas, there may be Medicare Levy Surcharge implications if your income exceeds the relevant Medicare Surcharge threshold.

For more information about travel and the Medicare Levy Surcharge visit the ATO website.


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I am going overseas, and I have never had hospital insurance

People who are going overseas may receive special consideration for Lifetime Health Cover. However, this special consideration only applies to people who have held private hospital insurance at some time since 1 July 2000. For Lifetime Health Cover purposes, there is generally no minimum period for which you need to hold private hospital insurance to qualify for special consideration.

If you wish to receive special consideration, you first need to take out private hospital insurance to establish a Lifetime Health Cover certified age of entry.

After you have established your certified age of entry, if you will be overseas for at least 12 months, you can cancel your private hospital insurance and when you return to Australia you do not have to pay a loading to cover your period overseas.

For more information about cancelling your hospital insurance when you go overseas, see I am going overseas. Can I drop my private hospital insurance?

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I live/have lived on Norfolk Island.

For Lifetime Health Cover Purposes, time spent on Norfolk Island is classified as time spent overseas. This can have different effects depending on the actual dates you were resident on Norfolk Island. For further information please discuss your case with your fund.

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I am a refugee.

Refugees have a grace period to purchase hospital insurance without incurring a Lifetime Health Cover loading.

If you are a refugee, you will pay the base rate premium if you purchase cover by the later of:

  • the 1 July following your 31st birthday, or
  • 1 year after the day you become eligible for Medicare.

If you do not take out hospital cover by this date you will lose your entitlement to pay the base rate premium. If you then decide to take out hospital cover in the future, you will pay a loading based on your Lifetime Health Cover age when you first take out hospital cover.

Of course, if you are unable to take advantage of this provision or choose not to take out private health insurance, you will still have access to high quality medical services under Medicare.

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I recently migrated to Australia.

New migrants receive a grace period to purchase hospital insurance without incurring a Lifetime Health cover loading. This is similar to the grace period that applied for Australian citizens and permanent residents when Lifetime Health Cover was introduced.

Migrants who became eligible for Medicare before 30 September 1999 do not pay a loading if they purchased hospital insurance before 15 July 2000 or their 31st birthday. If they did not purchase hospital cover by the later of these two dates, their loading is calculated according to their Lifetime Health Cover age.

Migrants who became eligible for Medicare after 30 September 1999 but before 23 April 2004 do not pay a Lifetime Health Cover loading if they purchase hospital cover by the later of:

  • the 1 July following their 31st birthday, or
  • 23 April 2005.

Migrants who become eligible for Medicare on or after 23 April 2004 do not pay a Lifetime Health Cover loading if they purchase hospital cover by the later of:
  • the 1 July following their 31st birthday, or
  • the first anniversary of the date they became eligible for Medicare.

If you were born on or before 1 July 1934, you are not affected by Lifetime Health Cover. This means that you can purchase hospital insurance at any time and you will always pay the base rate premium.

Examples:

  1. Kerry migrated to Australia and became eligible for Medicare on 21 March 2002. He purchased hospital insurance on 1 May 2002, when he was aged 59. Kerry does not pay a loading, because he purchased hospital insurance before 23 April 2005.
  2. Monique migrates to Australia and becomes eligible for Medicare on 1 March 2005. She first purchases hospital insurance on 15 June 2006, when she is aged 35. Monique will pay a loading, because she did not purchase hospital cover before 1 March 2006, which is the first anniversary of the day she became eligible for Medicare. Monique's loading will be calculated according to her Lifetime Health Cover age.
  3. Jill was born on 26 November 1932. She migrates to Australia, becomes eligible for Medicare, and purchases hospital insurance. Jill will never pay a loading because she was born before 1 July 1934.

I recently migrated to Australia from New Zealand

New migrants receive a grace period to purchase hospital insurance without incurring a Lifetime Health Cover loading. This is similar to the grace period that applied for Australian citizens and permanent residents when Lifetime Health Cover was introduced.

The grace period that applies for New Zealanders is slightly different from the grace period that applies for other migrants. This is because there can be some delay in determining when a New Zealand citizen becomes eligible for Medicare.

New Zealand citizens who became eligible for Medicare before 30 September 1999 do not pay a loading if they purchased hospital insurance before 15 July 2000 or their 31st birthday. If they did not purchase hospital cover by the later of these two dates, their loading is calculated according to their Lifetime Health Cover age.

New Zealand citizens who became eligible for Medicare after 30 September 1999 but before 23 April 2004 do not pay a Lifetime Health Cover loading if they purchase hospital cover by the latest of:

  • the 1 July next following their 31st birthday; or
  • 23 April 2005; or
  • the first anniversary of the day the determination is made that they are eligible for Medicare.

    New Zealand citizens who become eligible for Medicare after 23 April 2004 do not pay a Lifetime Health cover loading if they purchase hospital cover by the latest of:

  • the 1 July following their 31st birthday; or
  • the first anniversary of the day the determination is made that they are eligible for Medicare.

Examples:
  1. Kamal migrates to Australia from New Zealand. Medicare Australia makes the determination that Kamal is eligible for Medicare on 26 January 2004, when he is aged 33. Kamal does not pay a loading if he purchases hospital insurance by 23 April 2005.
  2. Ruth migrates to Australia from New Zealand. Medicare Australia makes the determination that Ruth is eligible for Medicare on 9 February 2005, when she is aged 34. Ruth first purchases hospital insurance on 19 April 2006. Ruth will pay a loading on her premium because she did not purchase hospital cover by 9 February 2006, which is the first anniversary of the day the determination was made that she was eligible for Medicare. Ruth's loading will be calculated according to her Lifetime Health Cover age.

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I can't afford hospital cover.

All Australians are entitled to receive free public hospital treatment under Medicare. This means that you do not have to take out private hospital cover in order to have access to high quality hospital services.

The decision to purchase private health insurance is a personal choice. People who cannot afford the premiums for private health insurance or do not wish to take out private health insurance for any other reason, continue to have the right to access the public hospital system through Medicare on the basis of clinical need.


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I am an existing health fund member and would like to change funds.

Under Lifetime Health Cover you are able to transfer from one fund to another without incurring any extra loading on your premium.

How is my Lifetime Health Cover premium affected if I want to change from a single policy to a family or couples policy?

If in the future you decide to take up family or couples cover, there is no problem doing so.

The premium that you pay for your family/couples cover will take into account your certified age at entry as well as your spouse's certified age at entry. The couple or family premium is calculated by dividing the base rate premium by the number of adults on the policy and applying each adult's loading to their proportion of the premium.

So the loading you were paying on your singles cover will now be applied to your proportion of your new couple or family policy. For example, if you joined hospital cover before or during the Introductory Grace Period there would be no loading applied to your half of the family premium. Let's say your spouse, on the other hand, has a Lifetime Health Cover age of 40 and has never had private health insurance in the past. They would pay a 20 per cent loading on their half of the family premium. If the premium for family cover is $1000, the health fund will put your half, $500, and your spouse's half, now $600 ($500 plus 20 per cent of $500 = $600) together and the premium for your family cover would be $1100.

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I was born on or before 1 July 1934

People who were born on or before 1 July 1934 are not affected by Lifetime Health Cover. They will be able to take out private hospital cover at any time in the future and pay the base rate premium.

I held health insurance whilst overseas

Private health insurance overseas does not count towards Lifetime Health Cover. This is because any private heatlh insurance held overseas does not contribute to the support to community rating, as Australian private health insurance is required to do.

Community rating requires Australian private health insurance funds to charge everyone the same premium regardless of health status and claims history. This ensures that health funds can not charge the elderly and the chronically ill a higher premium.

However, migrants have a grace period to purchase hospital insurance without incurring a loading.

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I currently have private health insurance but am experiencing financial difficulty.

If you are a member of private health insurance and are unable to afford your premiums due to financial hardship you have a number of options.

Option 1

You might like to consider approaching your health fund to seek a suspension of your membership. You can suspend your membership without incurring a loading on your premium.

If you took out hospital cover during the period 1 July 1999 to 15 July 2000, you will need to maintain your membership for a minimum period, that is, for a period of 366 days after 1 July 2000 before you lock in the right to pay the base rate premium.

Therefore, if you suspend your membership, when you resume your membership you must maintain your cover for the rest of your 366 days in order to lock in the right to pay the base rate premium.

Option 2

You may also be able to drop your cover without incurring a loading on your premium. Under the Lifetime Health Cover period of absence provision members are able to drop their cover for a cumulative period of 24 months in their lifetime without affecting their certified age at entry. However, after 24 months aggregate absence, their certified age at entry will be increased by one year for each additional 365 days of absence (ie. a 2 per cent loading will be applied to their premium for each additional 365 days of absence).

You must have a certified age at entry before you are able to access a period of absence.

Option 3

You may also like to consider changing your level of private health insurance to a lower level of cover that is more affordable. As long as you maintain some level of hospital cover with a registered health fund you will satisfy the requirements of Lifetime Health Cover.

I would like to know how much loading I am paying

If you are unsure how much loading you are paying, then contact your health fund or refer to the annual statement that your health fund sends you detailing your Lifetime Health Cover status.

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I am an Australian Defence Force member.

Under Lifetime Health Cover, everyone who was a member of the Australian Defence Force (ADF) on 1 July 2000 was granted a certified age at entry of 30. Thus members who choose to join a health fund immediately upon discharge will pay the base rate premium for as long as they maintain their cover.

Any delay in joining a health fund after discharge will be subject to the normal Lifetime Health Cover period of absence rules. This means that members who join a health fund within 24 months of leaving the defence force will retain their certified age at entry of 30 and pay the base rate premium. For each additional 365 days that they delay joining their certified age at entry will increase by one year and attract an additional 2 per cent loading on top of the base rate premium.

However, members who left the ADF before 1 July 2000 were not automatically given a certified age at entry of 30. Members in these circumstances will pay a premium based on their Lifetime Health Cover age when they first take out private health insurance.

People who joined the ADF after 1 July 2000, and who did not have private health insurance before joining, will be treated, for the purposes of Lifetime Health Cover, as if they had taken out private hospital cover on the day they joined the ADF. They will have a certified age at entry equal to the age at which they joined the ADF.

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I no longer have a DVA Gold Card.

If you held a Gold Card at any time since 1 July 1999, and the Gold Card was subsequently withdrawn by the Department of Veterans Affairs, you may claim your Gold Card period as a period with private hospital insurance.

This means that if you lose your Gold Card after 1 July 1999 and you subsequently take out private hospital insurance:

  • if you held a Gold Card on 1 July 2000, you will generally have a Lifetime Health Cover certified age of entry of 30. A certified age of entry of 30 generally means you do not pay a Lifetime Health Cover Loading; and
  • if you do pay a loading, the loading does not apply to the period during which you held a Gold Card.

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I didn't join private health insurance before Lifetime Health Cover was introduced on 1 July 2000 and I was over 31.

All Australians are entitled to receive free public hospital treatment under Medicare. This means that you do not have to take out private hospital cover in order to have access to high quality hospital services.

If you did not have hospital cover on 1 July 2000 and you choose to take out hospital cover with a registered health fund in the future you will pay a premium based on your Lifetime Health Cover age when you first take out the cover. A 2 per cent loading will be applied to your premium for every year you are aged over 30. For example, if you take out hospital cover at age 35 you will pay a 10 per cent loading on top of your premium.

However, those people who could not, or chose not to take out private health insurance prior to the introduction of Lifetime Health Cover will still benefit from the introduction of the scheme if they choose to take out private health insurance in the future. Lifetime Health Cover encourages more people to join private health insurance and to maintain their membership. This improves the overall health profile of health insurance members, which contributes to making premiums more affordable for all members.

Will people under 30 pay less under Lifetime Health Cover?

A person who is aged under 30 when they take out hospital cover will pay the same premium as a person who first takes out hospital cover at age 30. That is, they will pay the base rate premium.

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