On this page
- What is Lifetime Health Cover?
- When and why it was introduced
- Who pays it
- How much you have to pay
- How long it stays for
- Partners
- Permitted days without cover
- Exemptions
- Type of cover required
- New migrants to Australia
What is Lifetime Health Cover?
Lifetime Health Cover, sometimes called private health insurance loading, is a government penalty for not taking out private hospital cover after your 31st birthday.
It encourages you to take out private hospital cover earlier in life and encourages you to keep it. If you purchase hospital cover earlier in life, and keep it, you won’t pay an extra amount called Lifetime Health Cover Loading.
In essence, it’s aimed to achieve a more balanced distribution of costs within Australia's healthcare system by encouraging younger, healthier people to contribute to the private insurance pool.
But you can avoid it, helping you avoid stress and save potentially thousands of dollars.
When and why was it introduced?
Lifetime Health Cover was introduced on 1 July 2000. It was to address concerns with Australia’s health care system by encouraging people to take out private hospital cover earlier in life, and put less pressure on public hospitals.
At the time, there was a trend of people waiting until later in life, when they were more likely to need medical attention, to take out private hospital insurance.
This put a strain on the public Medicare system, as those who hadn't opted for private coverage relied solely on Medicare for hospital treatment.
Who pays it?
You’ll pay it if you have not taken out and maintained private hospital cover from 1 July following your 31st birthday, and then take it out later in life.
Example
Jane turned 31 in January 2022, so her Lifetime Health Cover base day is 1 July 2022. She held hospital cover on her 31st birthday but decided to cancel the policy in March 2022.
In September 2022, Jane started a new hospital cover. She pays a loading on top of her normal hospital premium as she did not have hospital cover on her base date of 1 July 2022.
How do they work out how much you pay?
You pay 2% more for private hospital cover for each year you’re over 30, this is what’s called the Lifetime Health Cover loading.
For example, if you wait until you’re 40, you end up paying 20% more on your private hospital cover. Similarly, if you wait until you’re 50, you end up paying 40% more.
If you’re still not sure, use privatehealth.gov.au’s Lifetime Health Cover calculator.
How long does the loading stay for?
You’ll keep paying your loading until you keep your private hospital cover for 10 continuous years. Then your loading will be 0%, if you retain your private hospital cover.
If you cancel your private hospital cover after the loading is removed, you may have to pay the loading again if you take out another private hospital cover.
Does your partner affect your loading?
Yes, if your partner hasn’t had continuous cover and therefore has a loading, the loading is calculated by taking an average of the loadings applied to the adults on the hospital cover.
So, if you have no loading, or 0%, and your partner has 20% loading, loading applied is 10% overall.
Permitted Days without Cover
If you have taken up hospital cover on or after your Lifetime Health Cover base day, then you can access the following 'permitted days without hospital cover' during which you do not have an active hospital policy, but your loading does not increase.
For most people, your base day is the later of 1 July 2000 or the 1 July after your 31st birthday.
If you have hospital cover on or after your base day, you are entitled to 1,094 days without hospital cover that won’t affect your LHC loading status, see privatehealth.gov.au for more details.
Are there any exemptions?
Yes, if you were born on or before 1 July 1934, you are exempt from LHC.
Can I get another type of cover to avoid the loading?
No, only private hospital cover with Australian registered private health insurers is considered to be complying hospital cover for the purpose of Lifetime Health Cover.
Extras cover, Overseas Visitors Health Cover, Overseas Student Health Cover, and international forms of insurance are not considered to be hospital cover for Lifetime Health Cover purposes.
New migrants to Australia
If you are a new migrant to Australia, then you have until the later of 1 July following your 31st birthday or the first anniversary of your full Medicare registration to take out private hospital cover without incurring a Lifetime Health Cover loading.
If the latter applies to you, your Lifetime Health Cover base day is the 12 month anniversary of your registration for full Medicare benefits (i.e. when you are eligible for a blue or green Medicare card).