What is the private health insurance lifetime health cover loading in Australia?
The Private Health Insurance Lifetime Health Cover (LHC) loading is an Australian Government initiative that adds a 2% penalty to your hospital insurance premium for every year you delay getting cover after your 31st birthday.
Was this helpful?
2 readers found this helpful
2 readers found this helpful
How it works in practice
Understanding Lifetime Health Cover (LHC) Loading
Lifetime Health Cover (LHC) is an Australian Government policy designed to encourage people to purchase and maintain private hospital insurance earlier in life. If you don't take out private hospital cover by 1 July following your 31st birthday (your "LHC base day"), you will be charged an additional 2% on top of your hospital premium for every year you delay.
For example, if you wait until you are 40 years old to get hospital cover, you will pay a 20% loading (2% for each of the 10 years delayed). This loading is capped at 70% and applies for 10 continuous years. Once you have held eligible hospital cover for 10 continuous years, the loading is permanently removed. The loading is specific to hospital cover and does not apply to general treatment (extras) cover.
Important exceptions
The LHC loading generally applies to most Australians. However, some specific situations provide exemptions or adjustments:
If you were born on or before 1 July 1934, you are exempt from the LHC loading.
People who were overseas on their LHC base day may have an exemption, provided they take out hospital cover within 12 months of returning to Australia. Special rules also apply for periods living overseas after your LHC base day, allowing for a 1,094-day (approx. three years) cumulative absence from cover before your loading increases.
If you had private hospital cover on 1 July 2000, you are generally exempt from the loading provided you have maintained continuous cover since then, or took out cover before your LHC base day.
What you should do now
-
Understand your LHC Base Day, which is 1 July after your 31st birthday, to determine if the loading applies to you.
-
Purchase an eligible private hospital insurance policy before your LHC Base Day to avoid the loading entirely.
-
If you already have a loading, maintain continuous eligible hospital cover for 10 consecutive years to have the loading permanently removed.
-
Contact your private health insurer or Medicare to check your current LHC status and confirm any applicable loading.
-
If returning to Australia after an extended period overseas, ensure you take out private hospital cover within 12 months of your return to avoid or minimise the loading.
Expert Notes
No expert notes have been added to this question yet.
People also asked
Explore highly relevant questions and get instant verified short answers.