Private health insurance
Private Health Insurance Rebate - removal of the rebate on lifetime health cover loading
Australian Government Rebate on private health insurance and Lifetime Health Cover
Private Health Insurance Rebate – removal of the rebate on lifetime health cover loading
The Australian Government Rebate on Private Health Insurance (the rebate) will no longer apply to the Lifetime Health Cover (LHC) component of hospital cover premiums. The changes will realign arrangements under the Private Health Insurance Act 2007 so that all recipients of the rebate receive a comparable benefit relative to their premium, regardless of whether they have a LHC loading or not. Rebate recipients will be treated consistently subject to age and income.How the Measure will work:
Lifetime Health Cover is a financial loading applied on top of an individual’s hospital premium at a rate of 2% for every year that an individual is over the age of 30 when they take out hospital cover, up to a maximum of 70%.Under the measure, the Government will no longer pay a rebate on the LHC loading component of the premium.
The LHC loading is removed once an individual has held hospital cover and paid the loading for 10 continuous years.
Example:
Doug is 42 years of age and has purchased a $2,000 premium p.a policy, but incurs a LHC loading of 20% because he first purchased private health insurance at age 40. Doug earns a total income of $64,000 p.a and therefore receives a 30% rebate from the Australian Government.Current situation – Total premium payable is $2,400 p.a. The Australian Government contributes $720 p.a through the rebate. Doug pays $1,680 p.a for his private health insurance.
Situation from 1 July 2013 – Total premium payable remains $2,400 p.a. The Australian Government contributes $600 p.a through the rebate. Doug pays $1,800 p.a for his private health insurance.
If you require further information on these changes, or other Lifetime Health Cover matters you can call the Lifetime Health Cover Hotline on 1800 307 446 (free call – anywhere in Australia).
Emails can be sent to Private Health
or
Lifetime Health Cover
Private Health Insurance Branch
Department of Health and Ageing
MDP 954
GPO Box 9848
CANBERRA ACT 2601
