lifetime health cover letter australia

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Lifetime health cover

LHC is a loading added to your hospital premium if you didn't have private hospital cover from the year you turn 31.

Last updated 29 June 2023

Lifetime health cover loading

Lifetime Health Cover (LHC) is a government initiative that encourages you to purchase and maintain private patient hospital cover earlier in life.

If you have not taken out and maintained private patient hospital cover from the year you turn 31 and then you decide to take it out later in life, you will pay a 2% LHC loading on top of your premium for every year you are aged over 30.

For example, if you take out private patient hospital cover when you are 40 years old, you could pay an extra 20% on the cost of this cover per year for 10 years. If you wait until you are 50 years old, you could pay 40% more per year for 10 years.

The maximum LHC loading that can be applied is 70%. Once you have paid LHC loading for 10 years of continuous cover, you will no longer have to pay this loading.

If you cancel your private patient hospital cover after paying for the LHC loading for 10 continuous years, you may become liable to pay the LHC loading again if you take out another private patient hospital cover later.

When you don't have to pay the LHC loading

You don't have to pay the LHC loading if any of the following apply to you:

• you are aged under 31 years old
• you hold an appropriate level of private patient hospital cover before you reach your LHC 'base day' – for many people, LHC base day is 1 July following their 31st birthday, but this can change depending on personal circumstances such as if you are overseas on this day
• you are a new migrant to Australia, and are aged 31 or over, and you had hospital cover within 12 months of being registered for full Medicare benefits
• you were born on or before 1 July 1934.

LHC loadings apply only to private patient hospital cover – they don't apply to general treatment cover (also known as ancillary or extras cover).

LHC and the private health insurance rebate

The government does not pay the private health insurance rebate on LHC loading component of a policy.

Example: No private health insurance rebate on LHC loading

On 1 July 2022, Rebecca pays a premium of $220 for two months of her private patient hospital cover. Due to Rebecca’s circumstances, her premium includes LHC loading of 10%. The premium eligible for the private health insurance rebate is $200 only, because the LHC loading of $20 does not qualify for this rebate.

Rebecca's income is $59,000 and she is eligible for the 24.608% rebate. She receives a rebate of $49, which is 24.608% of the $200 premium eligible for the rebate. Rebecca does not receive any rebate on the LHC loading of $20.

See Lifetime health cover External Link and Lifetime health cover calculator External Link for more information and to calculate your LHC.

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Private health insurance and Medicare

Private health insurance may help to cover some health care costs that we don’t.

on this page

What insurance covers, what insurance doesn’t cover, how to save money with private health insurance, how to claim medicare when you have private health insurance.

There are 2 types of private health insurance:

• hospital cover for things like accommodation and theatre fees
• general treatment cover for services like dental and physio.

Many insurers offer combined hospital and general cover. Most private health insurance lets you:

• choose your own surgeon or other specialist
• have treatment in a private hospital or as a private patient in a public hospital.

Insurers can tell you what they’ll pay for and how much they’ll pay. This will help you choose a level of cover that suits your needs and budget.

You can read more about:

• what private health insurance is on the Department of Health and Aged Care website
• what insurance covers on the PrivateHealth.gov.au website.

You can still use our services even when you have private health insurance. For instance, you can choose to go to a public hospital as a public patient.

Read more about health care and Medicare .

Private health insurance doesn’t cover:

• some specialist visits
• visits to a public or private hospital emergency department.

Unless you’re a patient in hospital, it also doesn’t cover:

• any x-rays or other scans
• any blood tests or other pathology tests.

Medicare normally covers these things. Read more about what Medicare covers .

Private health insurance rebate

You may be able to get a rebate on what you pay for private health insurance if you:

• earn less than the income threshold
• have a high enough level of hospital cover.

Your income must be within the threshold to get the rebate. It can either:

• reduce your insurance premium
• be a tax offset on your income tax return.

Read more about the Australian Government rebate on private health insurance .

Use the private health insurance rebate calculator to work out your rebate amount on the Australian Taxation Office website.

Private health insurance and tax

You may also have to pay an extra charge on top of the normal Medicare levy if you:

• don’t have private hospital insurance
• earn over the income threshold.

You pay this Medicare levy surcharge as part of your income tax.

Read more about Medicare and tax .

Lifetime health cover

Australia’s lifetime health cover system can save you money if you:

• get private hospital insurance before you turn 31
• keep this private cover for the rest of your life.

If you get private hospital insurance before you turn 31, you’ll qualify for lifetime health cover. This means you only pay the base rate for your insurance.

If you first get private hospital insurance after you turn 31, you’ll:

• pay an extra 2% for every year older than 31 you are when your cover starts
• keep paying this higher rate for at least 10 years after that.

James and Max are twins aged 41. James has had private hospital insurance since he was 29. Max got it for the first time this year. Although he chose the same insurer and the same level of cover as James, he pays more for it. This is because James qualifies for a lifetime health cover rebate and Max doesn’t. Max now pays 2% more each year because he waited 10 years after turning 31 to get private cover.

Find out more about lifetime health cover on the PrivateHealth.gov.au website.

If you have private health insurance, you can still use Medicare services.

There are times when you can claim Medicare benefits and use your private health insurance at the same time. For example, if you go to a public hospital as a private patient, you may be able to claim:

• from us for the costs we cover
• from your insurer for some or all of the rest.

This means you’ll need to claim from 2 places for the same bills. You’ll need to submit a Medicare claim form and a Medicare Two-way claim form .

If you submit your forms to us, we’ll pass on your insurer’s share to them. If you submit your forms to your insurer, they’ll pass on our share to us.

Learn more about how to submit a claim using Medicare Two-way .

You can also use Medicare Two-way to claim for a treatment that we don’t cover, like physio, dental and optical.

Not all insurers offer Medicare Two-way. You’ll need to check with yours. If yours doesn’t, you’ll need to make claims with us and with your insurer.

Makes submitting health claims easier, if you have private health insurance.

This information was printed 16 April 2024 from https://www.servicesaustralia.gov.au/private-health-insurance-and-medicare . It may not include all of the relevant information on this topic. Please consider any relevant site notices at https://www.servicesaustralia.gov.au/site-notices when using this material.

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• Lifetime Health Cover Loading

Over 30 with no Hospital cover?

Join great value hospital cover by June 30 to avoid the Lifetime Health Cover (LHC) loading or loading increase

What is the Lifetime Health Cover Loading?

Lifetime Health Cover (LHC) is an Australian Government initiative designed to encourage you to take out hospital cover earlier in life, and to keep it. It’s added onto your hospital premium if you wait until after you’re 31 to take it out.

If you join at 35 you’ll pay 10% more for the same policy, compared to someone who joined at 30. This loading is only on your hospital policy and remains in place for 10 continuous years.

Here's how it works:

• You turn 31
• You get Hospital Cover by June 30 and avoid the LHC
• If you don’t, you’ll get stuck paying an extra 2% for Hospital Cover – that’s the LHC loading
• For every year you're without Hospital Cover, your LHC loading increases by 2% to a max of 70%

Calculate your LHC loading

If you’re 31 or over, check your age to see how much extra LHC loading you could pay if you don’t have hospital cover on 1 July.

*Example used for illustrative purposes. Calculations based on a 2023 Single Gold Hospital Advantage Cover with a $750 excess in SA. No rebate and no direct debit discount applied. The LHC percentage will be added to your hospital cover and will remain in place for 10 continuous years.

Simple, just add Hospital Cover to your membership by June 30 following your 31st birthday.

Why is it added?

By law, we’re required to apply the LHC Loading to Hospital Cover when people join after their 31st birthday.

Why get hospital cover when there's a public system?

Jump the queue.

With Hospital Cover you can avoid long public hospital waits, which can take months or even years, by choosing your own doctor and timing for treatment.

Choose your own specialist

You get to choose your own specialist, as well as where and when you’ll be treated.

Have the same specialist care from start to finish

Continuity of care is something that can’t be undervalued.

Recover in the privacy of your own room Read more Recover in the privacy of your own room

All levels of hospital policies cover you for a private room, where one is available, giving you comfort and privacy during your recovery.

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*Premiums displayed are for applicants in SA entitled to base tier Australian Government Rebate, nil Lifetime Health Cover loading and $750 excess (relating to Hospital Cover only), and paid via direct debit.

Limits, waiting periods, restrictions and exclusions may apply. Benefits vary according to cover level- those noted throughout this page provide a snapshot of some that may apply on Base, Good, Better, Best, Combined Good, Combined Better and Combined Best Extras when using Health Partners Dental, participating dentists, Health Partners Optical, recognised optical providers and participating physiotherapists or hospital, and may relate to specific item numbers or incorporate further terms and conditions. 20% Pharmacy discount applies to most non-prescription items at Participating Pharmacies, to eligible Health Partners members with Extras cover. Conditions and exclusions apply, refer to www.healthpartners.com.au/pharmacy-benefits for full details and to find your nearest Provider.

Refer to hospital cover details , extras cover details and the Health Partners Member Guide for more information.

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What is Lifetime Health Cover?

Lifetime Health Cover (LHC) is an Australian Government initiative designed to encourage people to get their hospital cover early and keep it up.

How does Lifetime Health Cover work?

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.

To avoid this loading, you can take out hospital cover by July 1st following your 31st birthday, which is called your base day.

For example, if you wait until 35 to get hospital cover, your loading will be 10%. So, a $100 monthly hospital premium would become $110 with the added loading.

If you’re on a combined cover, the LHC loading is only applied to the hospital portion of your premium.

On a couple or family cover? The loading is calculated by taking an average of the loadings applied to the adults on the hospital cover. So, if one person has 18% loading and their partner has no loading, or 0%, the loading applied is 9% overall.

Does Lifetime Health Cover loading apply to everyone?

Well, no. There are a few groups of people who are exempt from the LHC loading. Some veterans and members of the Australian Defence Force may avoid having LHC applied. People born on or before 1 July 1934 won’t have LHC applied.

To learn more about LHC exemptions, visit: www.privatehealth.gov.au .

If you think you might qualify for an LHC exemption, you can apply using the LHC Exemption form .

Download form

Why should I consider hospital cover with Medibank?

Getting hospital cover doesn’t just mean you could avoid paying LHC loading after turning 31. Hospital cover could give you peace of mind in your day-to-day and help if the unexpected happens.

Find out more about hospital cover with Medibank.

Can my LHC loading be removed?

Once you have an LHC loading, it can only be removed once you’ve paid the loading for 10 continuous years. After this time, the loading may be reapplied if you drop your hospital cover and then take up cover again.

What if I switch health funds?

When you move funds, your LHC loading goes with you. If you’re switching to Medibank from another fund, 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.

Permitted days without hospital cover

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.

What if I drop my hospital cover?

If you exceed your 1,094 permitted days without cover, you’ll probably have to pay an LHC loading once you take out hospital cover again. If you were already paying an LHC loading, the loading will be higher.

What if I’m going overseas?

If you’re away from Australia for more than one continuous year (including visits back to Australia less than 90 days at a time, as you’re still considered to be living overseas) these days may not count towards your 1,094 permitted days without hospital cover.

What if I suspend my hospital cover?

If your health fund agrees to suspend your membership, this period isn’t counted towards your 1,094 permitted days without hospital cover. If you have a loading, it’s not going to increase while your cover is suspended.

If you’re ready to talk about hospital cover, call our team on 132 331

Or visit us in store .

Useful resources 

What are the common hospital procedures for someone like you.

Our interactive tool reveals the common procedures, what you might pay out-of-pocket and how health insurance could help manage the costs.

How much extra tax could you pay without hospital cover?

Use the Medicare Levy Surcharge Calculator to find out if you're eligible, or discover how much extra tax you may be paying by not having Hospital cover for a full tax year.#

Understanding Health Insurance

Health insurance can be tricky to understand. To help, we have put some handy guides together to get you started.

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Things you need to know

# Where annual income for Medicare Levy Surcharge purposes is over $93,000 as a single (or $186,000 as a couple/family).

Medibank Private Limited cannot advise on financial or tax matters. Any information provided to you is general in nature and does not take account of your individual circumstances. You should obtain your own independent financial advice.

For independent private health insurance advice, visit  privatehealth.gov.au .

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Lifetime Health Cover Calculators

Use these calculators to help you work out the lifetime health cover (LHC) loading payable on your private hospital cover.

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Did you receive a letter regarding Lifetime Health Cover?

The federal government has sent out a word of warning to uninsured Australians. On May 4, the Department of Health posted a letter and fact sheet regarding lifetime health cover (LHC), with the aim of providing Australians with more information with which to make a decision on their private health insurance needs .

It is typically the way that people often require medical assistance to a greater extent later in life, and the cost of health insurance varies depending on a policyholder's age. Planning ahead can help ensure that any private hospital treatment is covered by health insurance benefits.

However, LHC can prove a complex issue. Not everyone understands what the term means, and it's easy to believe with the foresight of youth that medical treatment will not be necessary at any point.

With around half of all Australians covered by private health insurance, many understand the risks of going without, and there is a real reason to consider it earlier in life.

What is Lifetime Health Cover?

Lifetime Health Cover  is an initiative to encourage those over the age of 30 to use the private health insurance model and avoid premium loadings.

A 2 per cent annual loading applies for any person purchasing private health insurance after July 1 following their 31st birthday, up to a maximum 70 per cent.

This soon adds up, and a person taking out health insurance for the first time at the age of 65 could see their coverage costing 70 per cent more than the same policy bought by a 30 year old.

LHC is not a part of general treatment (extras) cover, overseas visitors' cover, overseas students' cover or international health cover, so it should not be presumed that any of these policyholders will avoid the loading.

This is why, with almost 200,000 uninsured Australians approaching the 31-year milestone, the Department of Health has taken measures to help people better understand the risks by posting out a reminder.

Have you recently turned 31?

As explained above, LHC applies on July 1 after a person has reached 31. If your 31st birthday has been during the 2014/2015 financial year and you are currently uninsured, you may wish to purchase private health cover before June 30, or the first 2 per cent loading will be activated.

This is not a cost that is immediately felt; however, if you hold off until your 40th birthday before deciding that you can benefit from private health benefits, you will be paying significantly more for the same policy than you would by taking it out today.

If you have recently turned 31 and already have a health insurance policy, you will be exempt from the LHC loadings and there is no need to worry about this added cost.

Are you a migrant?

As an overseas national working in Australia on either a permanent or a  457 working visa , you will also need to consider LHC. The government also sent its mailer to 64,000 migrants who could fall into this category.

If you are over the age of 30 and have in this financial year registered for either a blue (interim) or green (full) card to receive Medicare benefits, you have until the first anniversary of your card's registration before the same LHC premium loading begins to apply.

By becoming a private health insurance policyholder, you will be covered against this 2 per cent loading being applied.

What to do next

So, if you fall into either of these two categories, have received a letter from the Department of Health, or if you simply want to become a private health insurance policyholder for any other reason, what's the next step?

Ideally, you'll want to find a policy that meets your budget – health funds tend to charge different rates, even for identical policies. You'll also need a policy that is tailored for your needs as an individual to make sure it is one of quality.

Comparing Australia's 34 health insurance providers will help you fill both of these requirements and find a suitable level of cover.

HICA is able to offer free and extensive assistance for anyone worried about their LHC loadings or looking to purchase private health insurance. Contact us today on 1300 44 22 11 for impartial and professional advice.

Related Posts

What are the downsides of not having health insurance?

What are the benefits of private health insurance?

All Australians should understand Lifetime Health Cover

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Lifetime health cover for migrants

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Fact-checked

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Figuring out whether or not you need private health insurance if you're an Australian living in Australia is tricky enough.

If you're a migrant or an Australian returning from overseas it gets even trickier. You may end up paying a lot more than you otherwise would if you don't understand the rules.

On this page:

Lifetime Health Cover for migrants

How it works, lhc for overseas residents and citizens, how does the lhc affect migrants to australia, who's responsible for making migrants aware of lhc loading, how to appeal, how to lodge an lhc-related complaint, the lifetime health cover loading.

The first thing to understand is that the Australian government really wants you to take out private health insurance to ease the burden on the public healthcare system, and that's fair enough.

It's why the government imposes a penalty on Australian citizens or permanent residents who don't take out private health insurance by the start of the financial year following their 31st birthday.

The penalty is called Lifetime Health Cover (LHC) loading , and it adds a two percent surcharge on top of your premium for every year you don't have private health insurance starting on 1 July after you turn 31.

LHC only applies to hospital cover; you're not required to take out extras cover (for things like dentistry and physio) to avoid LHC loading.

If and when you do get hospital private health insurance, the loading continues for 10 years.

The surcharge has a 70% cap, so if you delay getting private health insurance until age 66, for instance, almost half of your premium will be an LHC surcharge. As an example:

• For couples taking out cover in their mid-sixties and facing an annual premium of $3400, the total once you add in LHC loading would balloon out to $5780 a year. (Though you're exempt from LHC loading if you were born before 1 July 1934.)

Well before your mature years, however, an LHC surcharge can cost you many thousands of dollars in premiums you wouldn't have had to pay if you'd bought a private health insurance policy when the government wanted you to.

With the cost of private health insurance continuing to rise significantly even without LHC loading, such a financial penalty appears to have proven a pretty effective deterrent to people putting off private health insurance for too long if they plan to take it out at all.

The LHC protocol is pretty straightforward for Australian citizens, but what about migrants who arrived in Australia well after age 31 and didn't get the message about the costs of LHC loading and the deadline that applies to migrants?

Is it fair to charge LHC loading for years that a migrant did not yet live in Australia and therefore were not a burden on the Australian healthcare system? Whether it's fair or not, that's how it works.

We asked the Department of Health about this discrepancy, but a spokesperson simply reiterated the policy, saying "for migrants, the LHC loading of 2% for each year is applied regardless of whether or not they lived in Australia when they were aged 30 or over". 

It seems even less fair when you consider the migrant may well have had private health insurance in the country they came from.

LHC for migrants

• Migrants to Australia who are over 31 when they arrive have 365 days from Medicare registration to take out private health insurance and avoid LHC loading. If you miss the 365-day deadline, your 'base day' – when the 2% loading would begin – will be 1 July after your 31st birthday, regardless of where you were living at the time.
• If you migrate and turn 31 while living in Australia as a permanent resident or citizen, you have until 1 July following your 31st birthday or one year after Medicare registration to take out private health insurance and avoid LHC loading, whichever event comes second. In this case, your 'base day' is whichever of these dates applies to your situation.
• If you're a migrant who is overseas on 1 July following your 31st birthday and you registered with Medicare on or after 1 July 2009, you have 365 days after returning to Australia to take out private health insurance and avoid LHC loading.
• Australian citizens and permanent residents who were overseas on 1 July following a 31st birthday in Australia that fell after 1 July 2000 have 365 days after returning to Australia to take out private health insurance and avoid LHC loading. You can be in Australia for up to 90 days per visit before the 365-day countdown begins, though the 90 days will count toward that limit if you stay longer.
• Australian citizens and permanent residents who were overseas and over the age of 31 on 1 July 2000 have 1094 days to take out private health insurance once they return to Australia without incurring the LHC loading. The 1094 is a lifetime limit. You can return to Australia while living overseas for up to 90 days at a time without affecting the limit, but anything over 90 days counts against the 1094 total.

But bear in mind that health funds can make mistakes, either through incompetence or negligence. One Australian woman who was living overseas when LHC loading was first introduced in July 2000 recently contacted CHOICE about her LHC loading issue and ending up getting a $6200 refund from her insurer due to an incorrectly applied loading. 

If you migrate from one of the 11 countries that has reciprocal healthcare agreements with Australia, your 365-day countdown to take out private health insurance and avoid LHC loading after age 31 starts when you're granted full Medicare eligibility.

There are other ins and outs and exemptions to LHC loading. Go to the Private Health Insurance Ombudsman website to find out more.

Consider this real-life case study

• Our case study moved to Australia at age 45 and took out private health insurance (PHI) with HCF two weeks past the 365-day deadline to avoid LHC loading. He had not heard of the LHC levy, nor had his Australian wife. It was a coincidence that he was so close to the deadline. LHC information is communicated to migrants by the Department of Health and the Department of Human Services, but it's easy to miss the memo in the barrage of other migrant paperwork.
• Because our case study missed the deadline, HCF applied a 32% LHC loading. It meant that a 2% surcharge was added for every year after age 31 that this person did not have Australian private health insurance. The kicker is that this person did not migrate to Australia until age 45, so in effect he was penalised for accessing the Australian healthcare system without private health insurance for the 14 years between ages 31 and 45 – years when he did not live in Australia and could not have accessed the Australian healthcare system. Then another 2% loading was added for each year he was a resident of Australia without private health insurance, even though he was only about two weeks into his second year. During the years between ages 31 and 45 he had PHI in his own country.
• Our case study appealed to HCF regarding his situation to no avail, though his Australian wife (who had 1094 days, not 365, to take out private health insurance upon returning to Australia without incurring an LHC loading) was reimbursed $2188.55 after providing an International Movement Record .  

How much has our case study paid in LHC loading to date? Had he not caught wind of the LHC issue and requested the rebate from HCF, it would have been $5422.50 as of January 2017.

Factoring in his wife's rebate and $121.45 in LHC loading on his latest monthly premium payment, he has paid $3355.40 so far. His 10-year LHC period ends in July 2017.

According to the Department of Health spokesperson, the Department of Human Services sends migrants information about private health insurance and LHC loading along with their Medicare cards, and the Department of Health sends new migrants info about LHC in May each year.

A spokeswoman for the Department of Immigration told us "new migrants have access to a range of information about health and social services in Australia via links on the Department's website ," adding that "questions about how the Lifetime Health Cover loading is applied should be directed to the Department of Health".

Though the insurer made no such enquiries with our case study, the Private Health Insurance Ombudsman told CHOICE that health insurers should ask new customers about their immigration and citizenship status and how it might apply to LHC loading.

"It would be expected that health insurers should make appropriate enquiries at the time of joining to ensure the correct LHC loading is applied," a spokesperson said. "Where the incorrect loading has been applied, the insurer may be obliged to retrospectively correct this."

It's worth pointing out that the revenue generated by LHC loading stays with the private health funds instead of going to the health department to help offset the burden placed on the healthcare system by people without private health insurance, which would seem to make sense. 

against an LHC loading

If you're a migrant or returning citizen and think LHC loading has been inaccurately applied to your private health insurance premium, you'll need two documents to make your case.

• International Movement Record – Indicates when you first arrived in Australia as a permanent resident or returning citizen. You will need to request this from the Department of Immigration and Border Protection. Our case study received his in a few days.
• Medicare Eligibility Letter – Indicates when you first became eligible for Medicare benefits and, for migrants, is used to establish your "base day", or the day when the 365-day countdown to obtain private health insurance and avoid an LHC loading begins. Our case study had to visit a Centrelink/Medicare office to obtain this letter.

The Private Health Insurance Ombudsman requires you to try to resolve any dispute through the health insurance provider's complaints process first.

If that doesn't work out – or you think the insurer is taking too long to deal with the complaint – contact the PHIO on 1300 362 072, 9am-5pm Mon-Fri (AEST), or email [email protected].

Stock images:  Getty, unless otherwise stated.

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• How private health insurance works

What is Lifetime Health Cover?

Lifetime Health Cover (or LHC) is a government initiative that encourages Australians to get private hospital insurance by  the time they hit 31, and stay covered throughout their lives.  

How does this 'encouragement' work? If you take out Hospital cover when you're older, you'll pay more for it than someone who got it when they were younger. It only applies to Hospital cover, not Extras.

Don’t older people pay more for Hospital cover anyway?

No. Unlike many other types of insurance, health cover is ' community rated ' . That means health funds have to charge everyone (in a given state or territory) the same amount for the same cover. This is regardless of age, health issues or how often you claim.

LHC is about the age you start Hospital cover.

What's the deadline?

It's 1 July after your 31 st birthday . Reaching this deadline?  Get a quote now !

New to Australia? If you’re over 31, make sure you get Hospital cover within a year – see the government's info for new migrants . 

What if I miss this deadline?

The longer you wait to get Hospital cover, the more you'll pay if you get it later – an extra 2% for each year you’re aged over 30. This is known as LHC loading.

So if you wait until you’re 50, for instance, you'll pay an extra 40% LHC loading (20 years x 2%) than someone who got Hospital cover when they were 30. The maximum loading is 70%.

Here’s how it works in a range of scenarios:

If you have Singles cover

Any loading applies for 10 years, and the percentage is locked in. So if you start on 4%, you stay on 4% until the 10 years is up.

Then the loading goes down to 0% provided you've had continuous cover for that time (see below for more on this).

If you have Couples or Family cover

The percentage is calculated on the average between your loadings, which can get more complex.

Here are some examples:

Same LHC loading

That percentage is applied to the membership. E.g. if you’re both on 2%, the calculation is - (2% + 2%)/2 = 2%. The loading on the membership is 2% .

Different LHC loading

You’ll pay the average of your percentages. E.g. if yours is 2% and your partner’s is 6% the calculation is - (2%+6%)/2 = 4%. The loading on the membership is 4% .

Only one partner has loading

If one of you has never paid LHC loading – or completes their 10 years of continuous cover before the other – the same rules apply as example 2. E.g. if you have no loading but your partner has 4%, the calculation is - (0%+4%)/2) = 2% . The loading on the membership is 2% .

As with those on Singles cover, any LHC loading is removed once you’ve had continuous cover for 10 years (see below).

What's continuous cover?

Once you've got your Hospital cover, you need to keep it to avoid paying any LHC loading (or a higher one) in the future.

Fortunately, there’s some flex on what constitutes 'continuous'. You can take a break without undoing all your good work – up to a point.

You can be without Hospital cover for up to 1,094 days (one day short of three years) during your lifetime and still considered to have continuous cover.

Even better, short suspensions that health funds agree to don't count. Neither does spending at least one full year overseas. You can even come back to Australia for up to 90 days straight without the count starting up again (hello Aussie summer!).

Planning a break?

Given the continuous cover thing can be complex, please make sure you know where you stand if you’re going to have a break in your hospital cover after you're 31.

If you have any questions about LHC and how it may affect you, call us on 1300 727 538 . Your future self will probably thank you. 

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Home | Health Insurance | What is the Lifetime Health Cover loading?

What is the Lifetime Health Cover loading?

SafeWise experts have years of firsthand experience testing the products we recommend. Learn how we test and review . 

Trying to wrap your head around some of the complexities associated with health insurance in Australia? We get it – things can get a little complicated, especially if you’ve never really thought about private health insurance before. If you’ve come across terms like lifetime health cover (LHC) loading or the Medicare levy surcharge (MLS) but don’t know what they actually mean, you’ve come to the right place!

Lifetime health cover loading actually plays an important role in our country’s private health insurance system. It was designed to encourage people to take out private hospital cover earlier in life and hold onto it. But how exactly does LHC loading work, and what are you expected to pay if you don’t get private health insurance?

What is the lifetime health cover loading?

Lifetime health cover (LHC) is a government initiative that’s basically an incentivised scheme to help nudge everyday Aussies to secure private health insurance hospital cover. At the heart of this system is something called ‘financial loading’, but you only need to know it as LHC loading. This is a fee that’s applied to your hospital cover premiums. By taking out private hospital cover at a younger age and retaining it, you’ll benefit from cheaper premiums compared to those who join later in life.

To avoid LHC loading, you’ll need to get hospital cover before your LHC deadline, which for the vast majority of us is 1 July following your 31st birthday (or 12 months from your registration with Medicare if you are a migrant). If you only take out hospital cover after this deadline, then you’ll incur a minimum loading of 2% – and it gets higher every year.

For example, if you get private hospital cover when you’re 40, you’ll be walloped with an additional 20% on the cost of your cover, while waiting until 50 jumps up to an eye-watering 40% loading. This continues right up to a maximum loading fee of 70%.

Who has to pay the lifetime health cover loading?

Lifetime health cover loading applies to anyone in Australia who doesn’t take out private hospital cover before 1 July following their 31st birthday. As we’ve already mentioned, if you delay purchasing private hospital cover until after this deadline then you’ll be subject to a loading of 2% for each year you are over 30.

This loading is added to your premiums, resulting in higher costs. However, if you secure hospital cover before your LHC deadline then you can avoid paying the loading entirely – so long as you stay covered. Additionally, new migrants have 12 months from their Medicare registration date to take out private hospital cover without incurring the loading.

According to the ATO , you don’t have the pay LHC loading in the following circumstances:

• You are aged under 31 years old.
• You hold an appropriate level of private patient hospital cover before you reach your LHC 'base day' – for many people, LHC base day is 1 July following their 31st birthday, but this can change depending on personal circumstances such as if you are overseas on this day.
• You are a new migrant to Australia, and are aged 31 or over, and you had hospital cover within 12 months of being registered for full Medicare benefits.
• You were born on or before 1 July 1934.

How much is the lifetime health cover loading?

If you don’t have private hospital cover by the 1st of July after your 31st birthday, you’ll have to start paying an extra 2% in LHC loading for every year you wait. The bad news is that this figure gets higher and higher as you get older, eventually maxing out at 70%. Imagine having to pay 70% more on your premiums because you didn’t take out a basic hospital policy when you were young?

Picture it this way, assuming you haven’t got private hospital insurance at age 31 and beyond:

Even if you take out private hospital cover after age 31, you’ll still have to pay LHC loading for 10 more years. Only after you’ve had continuous cover for that decade will the LHC loading fee no longer be applied.

It really does pay to get covered early!

Get a quote

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How does lifetime health cover loading work if I switch to a couple or family policy?

Unfortunately, you’ll still have to fork out for LHC loading (if you had it applied previously) when you switch to a couple or family policy . It won’t magically disappear. However, if your partner doesn’t have LHC loading then you’ll at least be on a marginally lower rate.

This is because couples and families with hospital cover have their lifetime health cover loading determined by averaging out the loadings of the two adults covered under the policy. For example, if one person has 40% loading and the other only has 10% loading, the loading that will be applied to the policy will be 25% overall (40% plus 10% = 50%; divided by 2 people = 25%).

How long does the lifetime health cover loading last?

Let’s say you don’t take out private hospital cover before you turn 31. In this instance, your LHC loading amount will start at 2% when you are 31 and creep up every year until it maxes out at 70%. In this scenario, you’ll be hit with an increasingly higher lifetime health cover loading for every year until you eventually take out private hospital cover – not exactly a financially wise decision!

The good news is that when you do decide to get private health insurance, there’s a light at the end of the tunnel. If you keep your cover continuous for a full 10 years, then after that period of time you’ll no longer be slapped with lifetime health cover loading.

How do I avoid the lifetime health cover loading?

There really is only one way, but it bears repeating. After all, you don’t want to be on the hook for an extra fee for 10 years or more!

To avoid LHC loading, it's important to get hospital cover before you turn 31 or within a year of joining Medicare if you’re new to Australia. If you twiddle your thumbs and wait too long, you'll be charged an additional 2% for each year past the age of 30 when you do finally take out cover. So, getting private hospital cover earlier not only ensures you’re covered but also helps you avoid extra costs later on.

The reality is that the lifetime health cover loading is a pretty strong incentive to get you to invest in private health cover from an early age. Doing so can not only start you on good financial footing, but it can give you peace of mind that you won’t have to deal with higher premiums later in life.

Start comparing private hospital cover early on so you can take advantage of big savings and benefits down the line.

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• What is the lifetime health cover loading in Australia?

Chris Stanley

What Is The Lifetime Health Cover Loading In Australia?

Lifetime Health Cover (LHC) is a government initiative that encourages people to take out health insurance earlier in life and maintain it.

If you don't take out hospital cover before you're 31, you'll pay a 2% Lifetime Health Cover 'loading' (basically, a fee).

Another 2% will be added for each year you go without hospital cover.

Getting eligible hospital insurance before you're 31 can save you money in the long run.

And if you're over 31, taking out hospital cover now will minimise the financial impact of LHC.

Lifetime Health Cover loading applies to anyone who doesn't get hospital cover on or before the 1st July following their 31st birthday but then takes out eligible hospital insurance later in life.

You'll get a 2% LHC loading surcharge for every year you don't take out eligible hospital insurance once you turn 31.

LCH loading applies to hospital cover only -- it doesn't apply to extras or ambulance cover.

Why do I have to pay Lifetime Health Cover loading?

Lifetime Health Cover (LHC) loading is a 2% surcharge that exists to encourage people to take out hospital cover from a younger age.

The idea is that it will help reduce the burden on the public health system.

The Australian Government launched the LHC initiative in 2000.

How much will Lifetime Health Cover loading cost if I'm over 31?

If you don't have hospital cover by the 1st of July following your 31st birthday (also known as your 'LHC base day'), the lifetime loading fee will apply when you eventually take out eligible hospital insurance.

You'll get an extra surcharge on top of your premium for every year you don't take out hospital cover after your 31st birthday. Once you take out hospital cover, the applicable LHC loading is payable for 10 years.

Here's what percentage you'll have to pay on your premiums based on how old you are when first take out hospital cover:

The maximum LHC loading that anyone can pay is 70%, and the loading stops after 10 years of continuous hospital cover.

Are there any exceptions to Lifetime Health Cover loading?

You don't have to pay the Lifetime Health Cover loading if any of the following apply to you:

You're under 31.

You took out hospital cover within 12 months of registering for Medicare after moving to Australia.

You were born on or before 1 July 1934

You are a member of the Australian Defence Force and considered to have hospital cover (unless you're discharged from the ADF before you turn 31).

You hold a Department of Veterans' Affairs Gold Card.

The government also allows you 'Days of Absence'.

This is if you've previously held hospital cover but then stop for whatever reason.

An example of this would be if you decide to switch health insurers but only hold an extras policy with the new insurer.

You're allowed a total of 1094 Days of Absence (just under three years) during your lifetime.

If you use up your Days of Absence then you'll pay the LHC when you take out a new hospital cover policy.

You'll get an additional 2% loading each year on top of any loading you already have.

If you suspend your hospital cover due to a long overseas holiday, for example, or move overseas for a year or more, then this won't count towards your Days of Absence.

How can I prove my Lifetime Health Cover loading cost if I need to?

You'll need to prove what LHC loading you've been paying, if any, when you switch health funds .

You'll need to ask your old health fund for a Clearance Certificate that confirms your LHC loading status.

You then pass the certificate to your new health fund.

If you switch funds via Compare Club, we'll take care of all the paperwork, including your Clearance Certificate.

How does Lifetime Health Cover loading work if I move to a couples or family policy?

If you want to take out a couples or family policy, LHC loading is calculated by adding up your and your partner's individual LHC loading rates and dividing the sum in half (to get the average).

Here's an example:

LHC loading and couples

Calculating LHC loading for a couple buying hospital for the first time

Does switching health funds affect my Lifetime Health Cover loading?

In short, no. You can take a break from having hospital cover for a total of 1094 days without it having any effect on your LHC loading.

I moved to Australia after I turned 31. Do I need to pay Lifetime Health Cover loading?

Yes, but you won't have to pay immediately.

If you take out hospital cover within 12 months of registering for Medicare, you'll avoid LHC, no matter how old you are.

But if you miss that deadline then you'll have to pay a loading fee of 2% for every year you are aged over 30 and haven't held cover, no matter how old you are.

I'm moving overseas. Will this affect my hospital cover loading fee?

Provided you're living abroad for more than a year, then your LHC won't be affected.

You can also return to Australia for up to 90 days at a time and this won't count towards your Days of Absence.

If you're in Australia for longer than 90 days, then you're no longer considered to be overseas and this will eat into your Days of Absence.

LHC for Aussies travelling overseas

Should i consider private health insurance to avoid lifetime health cover loading.

The short answer is yes, if you think you may want to take out hospital cover at any time during your lifetime.

This will help you avoid high health insurance costs in the future.

The good news is that most health insurers offer lower-tier basic and bronze level hospital cover.

These are designed to be affordable and tax efficient and will also help you avoid the Medicare Levy Surcharge, if you earn over $90,000 or $180,000 as a couple.

What's more, many of these lower tier policies still come with some inclusions -- often for items such as dental surgery -- and you'll probably get emergency ambulance cover included as well.

This can be very helpful if you live in a state like Victoria, where residents have to pay for ambulance services.

But even some Basic and Bronze policies are better than others.

It's why it can be worth speaking to one of our specialists at Compare Club, who can make sure you're getting value for money.

How can I make sure I don't overpay on health insurance?

That's easy -- compare health insurance with us. This way you can get hospital cover that offers all the items you need at a price you can afford.

In the last decade, we've saved Australians, on average, $358.29 on their health insurance.

What's the best health insurance for avoiding the Lifetime Health Cover loading charge?

There is no 'best' health insurance if you're looking to avoid LHC loading, although you'll need to make sure you've taken out hospital cover, rather than just an extras cover policy.

Each fund will offer different levels of cover at a range of prices.

It's worth taking the time to compare your options.

This way, you'll be able to find the right cover for you and your budget.

We can help you find a policy that suits you needs and your bank balance from our panel of trusted insurers.

Lifetime Health Cover loading is relatively straightforward when you understand how it works.

But finding the right policy can still be complicated, which is why it's worth comparing health funds.

And if you think you'll ever need hospital cover, it pays to take out a policy sooner rather than later!

This guide is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.

Chris Stanley is the sales & operations manager of health insurance at Compare Club. With extensive experience and expertise, Chris is a trusted leader known for his deep understanding of health insurance markets, policies, and coverage options. As the sales & operations manager of health insurance, Chris leads a team of dedicated professionals committed to helping individuals and families make informed decisions about their health insurance needs.

Meet our health insurance expert, Chris Stanley

Chris's top health insurance tips

Australia’s public health system is world-class, but wait times for public hospitals can be long, inconvenient - and leave you living in constant pain while you wait.

An appropriate private health insurance policy can speed up your surgery, relieving your pain sooner.

Family health cover means your children are covered under the same policy as you.

Many health insurance policies come with a 12-month waiting period for pregnancy-related cover, so it’s a good idea to get a family policy organized well before starting your family. This means your child will be covered from birth until at least their early twenties (depending on which health fund you select).

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Consumers caught out by private health insurance not covering total hip replacement surgery

Health Consumers caught out by private health insurance not covering total hip replacement surgery

Linda McIver is, objectively, a pretty smart person.

She's a computer scientist, an author, has a PhD and runs an organisation that helps gets kids involved in data science.

She also has a genetic condition that affects her hips: acetabular retroversion.

This means her hip sockets face slightly the wrong way, leading to painful problems … and almost inevitably, a hip replacement.

Luckily for Linda, she had private health insurance. Or so she thought.

"I suspected this was coming, so I had actually checked — this is the bit that really, really upsets me," she says.

"I had checked my health insurance to make sure I was covered, and I thought that I was."

Her hip pain had got to the point where she could barely walk, and her surgeon had a cancellation which meant he could do the surgery within a fortnight. What a stroke of luck.

"He gave me the [Medicare] item number and I contacted my health insurance, feeling very confident and relaxed and said, am I covered for this item number?

"And they went, 'No, you're not'.

"I was like, 'What do you mean I'm not?"

It turned out Linda's policy covered joint reconstruction, not joint replacement.

"You can imagine the catastrophic thinking, 'Oh my God, I've made a terrible mistake', and I blamed myself," she says.

"I could barely walk at this point. I was in so much pain all the time. Whether it was walking or not, it was just constant pain.

"There was no way that I could upgrade my cover and wait to have this surgery."

Linda scrounged the money she needed — which was more than $40,000.

Apart from the pain, and the eye-watering expense, Linda just couldn't stop kicking herself. How had she missed this?

But then she started talking to people about what happened … and kept hearing the same thing coming back at her again and again: "Me too".

Pre-existing condition or bad luck?

One of those people was Virginia Creed. It's fair to say she's had a pretty crappy year.

Her husband died at the beginning of last year, leaving her to take care of their 25-acre farm and all their horses by herself.

"After my husband died, obviously I wanted to change my health insurance from the couples cover to singles cover," Virginia says.

"So I went about that and found out that I wasn't covered for joint replacements, much to my surprise."

Joint replacements had been part of the mix in the past, because Virginia's husband had received two.

Around the same time, she tweaked her leg running around with the grandkids and her doctor recommended an X-ray to see what was going on.

The timing couldn't have been worse. Virginia upgraded her health insurance to include joint replacement again on the very same day she visited the doctor about the twinge in her hip.

When, a couple of months later, she went back to her doctor and discovered arthritic changes that would mean she needed a hip replacement, her private health insurer argued it must have been a pre-existing condition and she would have to serve the 12-month waiting period.

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Letters and X-rays from her GP and surgeon arguing the initial appointment had nothing to do with arthritis wouldn't change their minds.

"They said, 'Oh no, because you presented to the doctor with a sore hip, you must have had things going wrong with your hip prior to the date we've said that your cover would commence,'" Virginia says.

"'So you actually have to wait the 12 months, like, bad luck.'"

When 'bill shock' bites

For people like Linda and Virginia, the public system is obviously an option, but waiting times for surgery are long, and increasingly so.

The most recent data from the Australian Institute of Health and Welfare shows people waiting an average of around six months for a total hip replacement — which is eight weeks longer than it was five years ago.

Anecdotally, public hospital waiting times are much longer than that, sometimes years long.

Experiences like Linda's and Virginia's fall under an umbrella called "bill shock" — when you're hit with an expense you weren't expecting.

Private health reforms over the past few years have streamlined the decision-making process and made costs more predictable, but there's still more work to do, says Nathan Kettlewell, a health economist at University of Technology Sydney.

"There are a lot of things for people to get their head around when they're buying health insurance," Dr Kettlewell says.

"There's a list of the benefits that it covers. There's consideration about the hospital network that it might be in. And then there's also uncertainty around what doctors will charge.

"You can look at a really long product disclosure statement and think you understand it but ultimately, even if you are fully across that, there's still some uncertainty with the fee you're going to pay.

"From a research perspective we're interested in trying to minimise the complexity of that environment and help people to make better informed choices."

With a couple of dozen different private health providers in Australia, there are thousands of possible permutations of coverage, extras and fees.

Dr Kettlewell points to the government's health insurance comparison website's , standardisation of forms and "metallic" coding (that is, the gold, silver and bronze levels) that have helped streamline things in the past few years.

But Linda reckons the complexity still works in the insurers' favour.

"Afterwards, I went back to the health insurance company to make sure we were covered in future, in case my other child needed it, or in case my husband needed something," she says.

"I said, 'Can you please upgrade us to the next cheapest tier that covers joint replacement?' And they couldn't answer that question. They couldn't tell me which that was. They said, 'Just go for the most expensive.'"

When she pushed back, they suggested she go through the packages and come up with a combination that suited her. Great idea, she thought … at first.

"I thought, 'I'm a smart person. I can go look at a website and figure this out,'" Linda says.

"To separate the extras from the hospital cover and try to find the right combination, I would have to sit down and do a real computer scientist thing on it with spreadsheets and figure it all out step-by-step. It would take days.

"That is not an accident. That is deliberate."

Calculating value in private health insurance

At the end of the day, insurance companies are businesses — and they need to make enough money across their members to be able to pay out for the big stuff.

And as far as insurance goes, it has a high return on investment, according to Rachel David, CEO of Private Healthcare Australia (PHA), the peak body representing health funds.

"For every dollar that an individual spends on health insurance premiums, they get 86 cents back, which is really high compared to something like general insurance where you only get 65 cents, or travel insurance where it's 40," Dr David says.

That's an average over the industry, and over a member's lifetime. Obviously some members will never claim that much and others will claim much more.

It's also a highly regulated industry, with the ACCC watching for legal breaches and providing annual reports to the Senate, and the Commonwealth Ombudsman to investigate complaints.

To avoid bill shock, Dr David says having conversations as early as possible is key.

 "When you are in front of a surgeon, it's really important that you get a quote from them in advance."

She says questions to ask include:

• What is the government going to pay for?
• What is the health fund going to pay for?
• Is there an out-of-pocket expense? And that needs to really include any other doctors who might be involved in the procedure.

Other consumer protections are also in the pipeline.

Dr David says PHA is advocating for informed financial consent to be mandatory, which would mean that if consent doesn't occur, then people would not be obliged to pay unexpected bills.

"I think that would be a genuine way to strengthen the consumer law to protect people when they're at their most vulnerable," she says.

Dr David says rapid inflation has made this issue even more visible.

"We've seen a 300 per cent increase over five years in out-of-pocket costs charged for medical services in hospital, which is what the health funds cover," she says.

"The health funds can't continue to chase rapidly inflating prices without putting premiums up."

For Linda, it still stings when she thinks about what it cost but she can't regret having had the surgery. It did the job and she can now walk without pain again.

As for Virginia, she has the same message for pretty much everyone she meets.

"Buyer beware," she says.

"The onus has come back on to every single person when they're looking for private health insurance, that they've got to be able to read the fine print, and with a magnifying glass."

Hear more about out-of-pocket insurance costs with Tegan Taylor on the Health Report and subscribe to the podcast for more.

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How Health Insurance Works

Health insurers, compare policies, lifetime health cover calculators.

This website has two calculators to help you determine the lifetime health cover (LHC) loading payable on your hospital cover and whether you have paid a loading for at least ten years and no longer have to pay it.

Lifetime Health Cover Calculator

Ten Years Continuous Cover calculator

This website has two calculators to help you determine the lifetime health cover (LHC) loading payable on your hospital cover. 

This calculator is for people who want to know their Lifetime Health Cover (LHC) base day and their loading if they took out hospital cover today or confirm their current Lifetime Health Cover loading.

It is based on the provisions of the Private Health Insurance Act 2007 which commenced on 1 April 2007. If you had hospital cover on 31 March 2007 and that cover is continuing, your LHC loading, if any, is based on the previous legislation. Your health insurer can provide you with details of that pre-2007 loading.

Ten Years Continuous Cover Calculator

This calculator is for people who are currently paying for hospital cover with a Lifetime Health Cover (LHC) loading. It will help you determine if you have paid a loading on your hospital cover for at least ten years.

It is based on the provisions of the Private Health Insurance Act 2007 . Under that legislation, any loading you are required to pay ceases after ten continuous years, or where more than ten years have elapsed, after ten years only interrupted by certain periods overseas, or other permitted breaks.

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