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What is lifetime health cover (LHC) loading?
LHC is an Australian Government initiative designed to encourage people to take out private Hospital cover earlier in life.
Who pays loading?
In general, health funds are required to apply a 2% LHC loading for every financial year to anyone without private hospital cover on 1 July in the year following their 31st birthday. You may avoid the LHC loading in some special circumstances (see below).
This loading is based on your age and doesn’t apply to Extras or Ambulance covers.
Rachel is 34. She’s taking out Hospital cover for the first time this year. Her loading will be 8% (2% for each year over 30).
So, if you wait until you’re 40 to take out Hospital cover, your premiums will be 20% higher than a 30-year-old on the same policy.
Loading is capped at 70%.
How long does loading apply for?
Any loading that applies to your premium will be removed after you’ve held eligible Hospital cover continuously for ten years.
Days without Hospital cover
To cover small gaps, such as switching from one fund to another, you can go without Hospital cover for a total of 1,094 days (i.e. three years less one day) during your lifetime, without affecting your loading.
If you have a total gap period of 1,095 days – you’ll pay a 2% loading when you re-join private Hospital cover. The loading will increase by 2% for every year after that without cover.
You can only access your Days of Absence if you have held Hospital cover at some point on or after your LHC base day. For most people, your base day is the later of 1 July 2000 or the 1 July after your 31st birthday.
Special circumstances for LHC loading
The general circumstances in which you may not be charged the LHC loading include:
- You were overseas on the 1 July following your 31st birthday
- You were over 31 and overseas on 1 July 2000
- You are a member of the Australian Defence Forces (ADF) on continuous full-time service and your medical services are provided by or through the ADF
- You hold a Department of Veterans' Affairs (DVA) Gold Card (the cardholder may be a veteran or the widow/widower and/or dependant of a veteran who is listed on the card).