Lifetime Health Cover

The Lifetime Health Cover initiative is a way of encouraging young Australians to take up private healthcare. Fundamentally, if you join private healthcare at a young age you benefit more as the years go by. If you don’t take out private hospital cover by your 31st birthday, you pay a 2% loading for every year you are aged over 30.

Think of the Lifetime Health Cover system as a way of spreading the load between the young and healthy and older Australians.

Under Lifetime Health Cover, people who take out private hospital cover before they turn 31 years old pay less for it than people who wait until they are older. Otherwise, they would end up subsidising people who join at a later age.

So, if you are around 30 years old and do not have private health insurance hospital cover, you should seriously consider taking it out now. After 1 July following your 31st birthday, you will pay 2% more for every year you wait.

You can save money on health insurance if you take it out sooner rather than later.

If you’re privately insured before 30 June of the year you turn 31, you will be on the lowest premium rate for life. From the age of 30, you will have to pay an extra 2% for every year you remain uninsured. For example, if you wait until you’re 40 to take out private health insurance, you’ll pay an extra 20%, and if you wait until you’re 45, you’ll pay an extra 30%.

Lifetime Health Cover (LHC)

LHC applies to everyone born after 1 July 1934 and sets your premium rating for life when you first take out private health insurance hospital cover. If you do not have hospital cover on 1 July following your 31st birthday and then decide to take out hospital cover later in life, you will pay a 2% loading on top of your premium for every year you are aged over 30.

For example, if you take out hospital cover at age 40, you will pay 20% more than someone who first took out hospital cover at age 30. The maximum loading is 70%.

Once you have paid a LHC loading on your private hospital insurance for 10 continuous years, the loading is removed as long as you retain your hospital cover.

That’s a fair reward for those members who have shown a long-term commitment to the private health system.

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