Better health and ageing for all Australians

Lifetime Health Cover

Lifetime Health Cover - Frequently Asked Questions

This page contains questions and answers regarding the Lifetime Health Cover.

In this section:

Do people aged under 31 pay less under LHC?
No. A person who is aged under 31 when they take out hospital cover will pay the same premium as a person who first takes out hospital cover when aged 31. That is, they will pay the base rate premium.

Can I vary the level of my private health insurance cover without affecting my LHC status?
Yes. You are able to upgrade or downgrade your hospital cover policy under LHC without affecting your LHC age. If you have a LHC loading the same percentage loading will apply to any hospital cover premium regardless of whether you change to a higher or lower level of cover.

The only circumstances under which your LHC loading would be affected by a variation to your private health insurance cover would be if you changed from a policy that includes hospital cover to a policy that does not. In this case, “permitted days without hospital cover” would apply. That is, your LHC loading would be unaffected for the first 1,094 days that you were without hospital cover. On the 1,095th day, your LHC loading would increase by 2%, and would continue to increase by 2% for each year you are without hospital cover from that point onwards.

Do premiums for private health insurance general treatment cover and ambulance cover count towards LHC?
No. LHC does not apply to general treatment cover (also known as ancillary or extras cover) or ambulance cover. You need to take out a private health insurance policy that includes hospital cover in order to be assigned a LHC age and lock in lower hospital cover premiums for the rest of your life.
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What if I take out private health insurance after 1 July following my 31st birthday?
People who purchase hospital cover for the first time after the 1 July following their 31st birthday will pay a LHC loading. This loading is based on the person's LHC age. The loading is 2% for each year the person's LHC age is over 30.

There is a LHC calculator on the Private Health website at www.privatehealth.gov.au. This calculator will calculate your loading based on the answers you provide to a series of questions designed to determine your LHC age.

What are “permitted days without hospital cover”?
The Government understands that there are various reasons private health insurance members may need to drop their membership for brief periods. Therefore, the LHC legislation allows privately insured people who need to drop their membership, for whatever reason, a cumulative period of 1094 days without hospital cover through their lifetime without affecting their LHC age. You can only use “permitted days without hospital cover” if you have held private health insurance hospital cover on or after your LHC base day and have been assigned a LHC age. If you want to find out how many of your “permitted days without hospital cover” you have used, you should contact your insurer.

How can I find out how much loading I am paying?
If you are unsure how much loading you are paying, then contact your health insurer or refer to the annual statement that your health insurer sends you detailing your LHC status.

How is my LHC loading 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 couples or family cover will take into account your LHC age as well as you partner's LHC age. In case of joint hospital cover, the LHC loading is determined by averaging out the respective loadings of the adults covered by the policy.

So, if two adults decide to purchase a family hospital cover policy and both are liable to pay a LHC loading, then their health insurer will determine the applicable LHC loading by adding the two LHC loadings together and then dividing the result by 2.

The same would apply if only one of the adults covered by the same family hospital cover policy had a LHC loading.
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What is the base rate premium?
The base rate premium is the price a person joining before 1st July following their 31st birthday would pay for hospital cover. This premium is set by individual health insurers. The base rate premium will vary between different health insurance products and between different health insurers and may increase over time as a result of cost pressures such as new, expensive health technologies and the ageing of the population.

I am an Australian who was living overseas when LHC was introduced
Under the LHC legislation, people who were Australian citizens or Australian residents on 1 July 2000 (when LHC was introduced) who turned 31 on or before
1 July 2000 and were overseas on 1 July 2000 are taken to have held hospital cover on their LHC base day.

You can have returned to Australia for periods of up to 90 consecutive days, and still considered to be overseas.

When you return to Australia for a period longer than 90 days you will be taken to be using your “permitted days without hospital cover” from when you return until when you take out hospital cover. If you exceed your “permitted days without hospital cover” i.e. remain without hospital cover for a period longer than 1094 days after your return to Australia, you will incur a LHC loading on the 1095th day of 2%. This loading will increase by 2% for every year you continue to be without hospital cover.

I was overseas on the 1 July following my 31st birthday
Australian citizens who are overseas on 1 July following their 31st birthday have 12 months from when they return from overseas to take out hospital cover before they incur a LHC loading.

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.

I am going overseas. Can I drop my private hospital insurance without incurring a LHC loading?
If you have private health insurance hospital cover and are going overseas, there are two ways to cease paying for your hospital cover during the period you are overseas without incurring a LHC loading on your private hospital insurance.

1: Suspension
You can apply to your health insurer for a suspension of your private hospital insurance. Periods of suspension may be granted at the discretion of your insurer. Your insurer decides how long the suspension will be.
For LHC 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.
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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 insurer 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.

When you return to Australia for a period longer than 90 days you will be taken to be using your 1094 “permitted days without hospital cover” from when you return until when you take out hospital cover. If you exceed your “permitted days without hospital cover” i.e. remain without hospital cover for a period longer than 1094 days after your return to Australia, you will incur a LHC loading on the 1095th day.

If you commence private health insurance after you return, your insurer may ask you to provide evidence of your period overseas. You can obtain a copy of your international movement record from the Department of Immigration and Citizenship.

Warning:
If you have hospital cover and are considering cancelling or suspending your cover while you are overseas, you may be liable to pay the Medicare Levy Surcharge if your income exceeds the relevant Medicare Surcharge threshold. For more information about travel and the Medicare Levy Surcharge visit the ATO website.

I live/have lived on Norfolk Island
For LHC purposes, if you live on Norfolk Island you are classified as being overseas. You can return to Australia for periods of up to 90 days and still be considered as being overseas.

I recently migrated to Australia
If you are a new migrant to Australia your LHC base day will be the later of:
  • 1 July following your 31st birthday; or
  • The first anniversary of the day you registered for full Medicare benefits.
If you take out private health insurance hospital cover before your base day you will not have to pay a LHC loading on your cover. If you take out hospital cover after your base day you will have to pay a LHC loading of 2% for every year you are aged over 30.

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.

I currently have private health insurance and would like to change insurer
Under LHC you are able to transfer from one insurer to another without incurring any extra LHC loading.

I was born on or before 1 July 1934
People who were born on or before 1 July 1934 are not affected by LHC. They can take out private hospital cover at any time and pay the base rate premium.

I held health insurance whilst overseas
Overseas health insurance does not count for the purposes of LHC. LHC operates under the authority of Australian legislation, namely the Private Health Insurance Act 2007 (the Act). The Act stipulates that only a Complying Health Insurance Product (CHIP) can protect people against incurring LHC loadings. A health insurance policy can only be a CHIP when it is offered by an Australian registered private health insurer and meets the requirements of the Act.

However, migrants have a grace period of 12 months from when they register for full Medicare benefits 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 have 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 insurer to seek a suspension of your membership. You can suspend your membership without incurring a loading on your premium.

Option 2
You may also be able to drop your cover without incurring a loading on your premium. Under the LHC “permitted days without hospital cover” provision members are able to drop their cover for a cumulative period of 1094 days in their lifetime without affecting their LHC age. However, if you exceed your “permitted days without hospital cover” i.e. remain without hospital cover for a total period longer than 1094 days, you will incur a LHC loading or, if you already have a LHC loading this will begin to increase, by 2% for every year (or partial year) that you remain without hospital cover.
You must have held hospital cover on or after your LHC base day and been assigned a LHC age before you are able to access “permitted days without hospital cover”.

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 insurer you will satisfy the LHC requirements.

I am an Australian Defence Force member
Under LHC, everyone who is a member of the Australian Defence Force (ADF) on continuous full-time service and whose health services are provided by or through the ADF are taken to have hospital cover for LHC purposes for the period that they are a member of the ADF.

When you are discharged from the ADF you will be taken to be using “permitted days without cover” until you take out private health insurance hospital cover. If you exceed the “permitted days without hospital cover” LHC loadings will apply should you choose to take out hospital cover in the future.

Therefore, if you were a member of the ADF on 1 July following your 31st birthday or 1 July 2000 you will not have a LHC loading if you take out hospital cover immediately after discharge. If you already had a LHC loading when you joined the ADF this will remain the same as when you joined the ADF if you take out hospital cover immediately after discharge.

I no longer have a Department of Veterans’ Affairs (DVA) Gold Card
For the purposes of LHC, you are considered to have private health insurance hospital cover for any period that you have held a DVA Gold Card. If your Gold Card is cancelled you will be taken to be using “permitted days without hospital cover” until you take out private health insurance hospital cover. If you exceed the “permitted days without hospital cover” LHC loadings will apply should you choose to take out hospital cover in the future.

Can I apply for an exemption from my LHC loading?
No. There is no means by which the Minister or the Department of Health and Ageing can reduce or remove a correctly calculated LHC loading. According to the current legislation, the only means by which a person may have their LHC loading removed is by paying their LHC loading for a continuous period of 10 years.
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I have a LHC loading, will I have to keep paying this loading for as long as I have hospital cover.
Any LHC loading that a person is required to pay will be removed from their premium after 10 years of continuous hospital cover.

The accumulation of the 10 year period can be interrupted by “permitted days without hospital cover” without reverting back to zero. However, any “permitted days without hospital” cover do not actually count towards the accumulation of the 10 years. Only days on which you are paying the LHC loading will count towards your 10 years accumulation. If your 10 years of continuous hospital cover is interrupted by any “permitted days without hospital cover”, then the 10 year period is extended by that number of days.

You may change health insurer, upgrade or down grade your hospital cover without it affecting the accumulation of your 10 year period.

If you benefit from the removal of your LHC loading and then decide to cancel your hospital cover, you may become liable to pay a LHC loading again in the future.

It is important that you provide your insurer with appropriate evidence to help them to calculate when your LHC loading should be removed.

What documentation should I provide to my insurer as evidence of my 10 years of continuous hospital cover so my LHC loading can be lifted?
Your private health insurer should be provided with a copy of any documents that have been used to calculate or verify your LHC loading such as transfer certificates or leaving certificates from previous insurers, records of policy suspension, international movement records etc.

If you have changed insurers taking out private health insurance you should obtain a copy of your records from your previous insurer or grant them permission to provide your records to your new insurer on your behalf.

You should maintain a copy of these documents for your own records.

How does LHC affect me after my loading has been dropped?
If you benefit from the removal of your LHC loading and then decide to cancel your hospital cover, you may become liable to pay a LHC loading again in the future.

If your LHC loading is removed after 10 years of continuous cover and you later cancel your hospital cover, then on the first day after the cancellation that is not a “permitted day without hospital cover” you will incur a LHC loading of 2% in addition to any amount that previously existed before it was removed.

The loading will increase by 2% each year until you rejoin hospital cover.
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