The Lifetime Health Cover LHC Loading is a legislated Australian Government requirement that encourages you to take out private hospital cover early on in your life. You’re rewarded with lower premiums for taking out cover and maintaining it.
Once you turn 31, a 2% loading is added to your hospital cover premium for every year you’re without hospital cover. This is called the Lifetime Health Cover (LHC) loading.
How it Works
If you wait until you’re aged 31 and take out private hospital cover in the following financial year, premiums will be 2% more expensive. This increases by 2% for each subsequent year you delay taking out private hospital cover. This additional percentage is called the LHC 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 aged 50, you end up paying 40% more.
The LHC Loading is capped at 70% at age 65, and removed after 10 continuous years of appropriate private hospital cover. The loading may be reapplied if you drop your hospital cover and then take up cover again.
In other words, the earlier you take out private hospital cover, the better, as deferring your decision can be costly.
Family & Couples
What happens if you have had continuous cover but your partner/spouse on your policy has not?
The loading is calculated by taking an average of the loadings applied to the adults on the hospital cover. So, if one person has 20% loading and their partner has no loading, or 0%, the 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.
Switching Health Funds
When you move funds, your LHC loading goes with you. When transferring cover, we will contact your previous insurer to obtain a clearance certificate. It’s a good idea to maintain your hospital cover up until the date that you transfer, to avoid using up any of your permitted days without cover unnecessarily.
Can I get my LHC Waived?
Private Health Insurers are legally required to apply LHC loadings to any new policy holders who were not privately insured under an appropriate cover by their LHC base day, which for most Australians is 1 July following their 31st birthday. New migrants to Australia can avoid incurring LHC loadings by commencing appropriate private hospital cover within 12 months of being registered as eligible for full Medicare benefits.
There is no function or clause in the legislation which regulates LHC which allows the Minister for Health, or their delegate, to waive a correctly calculated LHC loading under any circumstance.
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).
LHC loadings apply only to private patient hospital cover – they do not apply to general treatment cover (also known as ancillary or extras cover). The government does not pay the private health insurance rebate on LHC loading applied to the costs of a policy.
For more information around LHC