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Member Insider - Understanding Lifetime Health Cover

31 May, 2017
Lifetime Health Cover (LHC)
If you're around 30 years old, you might have received or might be receiving a letter from the Department of Health about taking out Private Health Insurance. We've got some answers to your most pressing questions!

I have just received a letter from the Department of Health about Lifetime Health Cover loading. What does this mean?


Each year, the Department of Health posts letters to Australian citizens and permanent residents who recently turned 31 or registered for full Medicare benefits. The letters are sent to inform you about the Lifetime health cover rules, which will apply to you if you decide to purchase private hospital insurance.

What is Lifetime Health Cover?


Lifetime Health Cover involves a financial loading (LHC loading) on your private health insurance hospital cover. It is designed to encourage people to take out hospital cover earlier in life, and to maintain their cover. If you take out hospital cover earlier in life, and keep it, you will pay lower premiums compared to someone who joins when they’re older.

If you don’t want to pay a LHC loading you need to buy hospital cover before your LHC deadline. Your deadline is 1 July following your 31st birthday; or for new migrants, 12 months from your registration for Medicare. LHC loadings apply only to hospital cover. LHC loading does not apply to extras cover. 

I have turned or will turn 31 during the 2016-17 financial year 

You have until 30 June 2017 to purchase private hospital cover without incurring LHC loading. If you purchase hospital insurance from 1 July 2017 onwards, then you will incur a loading which increases the cost of insurance.

I am aged 31 or over, and I am registered for interim or full Medicare benefits (usually a blue or green Medicare card) during the 2016-17 financial year.

You have until the first anniversary of the date you registered for your Medicare card to purchase private hospital cover without incurring LHC loading. If you purchase hospital insurance after the anniversary date has lapsed, then you will incur a loading which increases the cost of insurance. The older you are at the time of purchase, the higher the cost. 

But I am new to Australia

If you are a new migrant to Australia, and are aged over the LHC deadline (1 July following your 31st birthday), special conditions apply. As a new migrant to Australia you do not have to pay a LHC loading if you take out hospital cover within 12 months of being registered for Medicare. As a migrant, it is a good idea to consider taking out hospital cover in the first year after you register for Medicare. If you wait and take out hospital cover after this date you will pay more for your hospital cover as the price will also include the LHC loading. So, the older you are, the more it will cost.

What if I miss my Lifetime Health Cover loading deadline?

If you take out hospital cover after your LHC loading deadline you will have to pay a LHC loading of 2% for every year you are over 30. If you maintain continuous hospital cover for 10 years the LHC loading is removed and you will no longer have to pay the LHC loading on your hospital cover. However, if you choose to cancel your hospital cover then take it out again later you may have to pay a LHC loading when you re-join. To cover small gaps (Days of Absence), such as switching from one insurer to another, you can be without hospital cover for periods totalling 1094 days (i.e. one day less than three years) during your lifetime, without impacting on your LHC loading. If you have a gap of 1095 days you will pay a 2% loading. For every 365 days without cover after that, your LHC loading will increase by 2%. If you apply to your health insurer to suspend your hospital cover for a brief period, and it agrees, this period of suspension does not impact on your LHC loading.

How long do I have to pay LHC loading?

Your LHC loading can be removed after you have completed 10 years of continuous cover. Please note that although you can break up your 10 years of continuous cover with any of periods without hospital cover, the breaks in cover do not count towards the 10 years. For example, if you pay your loading for 7 years and then cancel your cover while living overseas for several years, you will still have to pay 3 more year of loading on re-joining for the loading to be removed.

You should also note that if you use up your full 1094 Days of Absence, the continuity of your 10-year period of cover is broken.  If you re-join hospital cover after 1094 Days of Absence has been exceeded, you will have to pay an increased loading and you will have to start your 10 years of continuous cover from the date of re-joining.

For more info, check out this handy FAQ from the Department of Health, or call us on 1300 654 123.

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