How does Lifetime Health Cover work?
LHC is an Australian Government initiative designed to encourage people to take out health insurance earlier in life.
LHC requires health funds to charge a loading when an individual takes out hospital cover. This loading is based on the age of the member and does not apply to Extras or Ambulance ancillary covers.
Who pays loading?
The loading applies to those who don’t have private hospital cover on 1st July in the year following their 31st birthday. A 2% loading applies for every financial year they go without private health insurance following their 31st birthday.
Rachel is 34 years old and is taking out Hospital cover for the first time this year. Her loading will be 8% (2% for each year over 30 years)
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 hospital cover continuously for ten years.
Days without hospital cover
To cover small gaps, such as switching from one fund to another, you are able to be without hospital cover for periods totalling 1094 days (i.e. three years less one day) during your lifetime, without affecting your loading.
If you have a total gap period of 1095 days - you will pay a 2% loading on re-joining 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 Lifetime Health cover base day. For most people, your base day is the later of 1 July 2000 or the 1 July after your 31st birthday.