Lifetime Health Cover is a Government initiative that started on 1 July 2000. It was designed to encourage people to take out hospital insurance earlier in life, and to maintain their cover.
In Australia, private health insurance is not ‘risk-rated’ like most forms of insurance. Private health insurers cannot refuse to insure any person, and must charge everyone the same premium for the same level of cover, despite their risk profile and likelihood of using health services.
LHC is a financial loading that can be payable in addition to the base rate premium for your private health insurance hospital cover. If you purchase hospital cover earlier in life, and keep it, you will pay lower premiums compared to someone who joins when they are older.
LHC loadings apply only to hospital cover. They do not apply to private health insurance general treatment cover (also known as ancillary or extras cover).
To avoid paying a LHC loading, you need to purchase hospital cover by 1 July following your 31st birthday. If you purchase hospital cover after this date you may be required to pay a LHC loading – 2% for each year you are over 30. For instance, if you wait until you are 40, you could be paying an extra 20% on the cost of your hospital cover. If you wait until you are 50, you could pay 40% more. And so on, up to a maximum of 70% more.
If you are a new migrant to Australia, and are aged 31 or over, you will not have to pay a LHC loading if you purchase hospital cover within 12 months of being registered for full Medicare benefits.
If you delay purchasing hospital cover for more than 12 months after your registration, you will have to pay 2% more for each year you are aged over 30 when you purchase your hospital cover.
Any LHC loading that you pay will be removed from your hospital cover premium after you have held hospital cover for 10 continuous years. However, if you cancel your hospital cover after the LHC loading has been removed, you may become liable to pay a LHC loading again in the future.
If you were born on or before 1 July 1934, you are exempt from the LHC loading. You can purchase hospital cover at any time and pay the base rate premium.
In some cases, calculating your LHC loading can be fairly complicated. The Private Health Insurance Ombudsman (PHIO) has developed a Lifetime Health Cover Calculator, which will help you to work out your LHC loading based on your answers to a series of questions.
If you require further information on Lifetime Health Cover you can call the Lifetime Health Cover Hotline on 1800 307 446 (free call – anywhere in Australia).
Emails can be sent to Private Health
Lifetime Health Cover
Private Health Insurance Branch
Department of Health and Ageing
GPO Box 9848
Canberra ACT 2601