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Lifetime Health Cover Loading

Lifetime Health Cover loading is a penalty for buying private health insurance later in life. Here’s how to get around it.

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Lifetime Health Cover (LHC) loading is a government initiative, designed to encourage Aussies to buy private health insurance sooner, rather than later.

Basically, it means you're charged a penalty if you only buy health insurance when you're older. It kicks in shortly after your 31st birthday and adds a 2% fee for every year you don't have hospital cover over the age of 30.

This guide will explain exactly how Lifetime Health Cover works, how much it might cost, and where you can find a hospital policy now, so you can avoid a penalty further down the line.

How does Lifetime Health Cover loading work?

Lifetime Health Cover loading increases your premium by 2% for every year you don't have private health insurance over the age of 30. So if you wait until you're 40, you'll be charged an extra 20% on top of your premium, if you wait until you're 50, it'll be 40% extra, and so on.

The maximum penalty anyone can be charged is an additional 70% on top of their premium. That penalty stays in place until you've held private health insurance for 10 continuous years.

If you never get private health insurance, you'll never have to pay LHC loading. But remember, almost half of all Australians have health insurance and many of them only decide to buy it later in life, so you might end up changing your mind further down the line.

How much does Lifetime Health Cover loading cost?

The cost of Lifetime Health Cover loading depends on how long you've gone without private health insurance and what level of cover you choose.

The table below uses the current base price of various policies offered by a major Australian health fund. Without taking annual price hikes into account, it shows how much your premiums could increase, if you wait to buy health insurance.

Bought at 30Bought at 40Bought at 50Bought at 60
Basic$68$81.60$95.19$108.80
Bronze$80$96$112$128
Silver$99$118.80$138.60$158.40
Gold$168$201.60$235.20$268

How can I avoid the penalty?

If you want to avoid Lifetime Health Cover Loading, you'll have to buy private hospital insurance before your 'base day'. For most people, their 'base day' is 1 July, immediately following their 31st birthday.

However, your base day may be different if you were overseas on this day, you were born before 1 July 1934, or if you're a recent migrant to Australia.

If you are a new migrant, and are over the age of 31, you will have to get hospital cover within 12 months of being registered for full Medicare benefits, in order to avoid LHC loading.

How does LHC loading work for couples?

The premium loading for couples and family policies are averaged out between the two policyholders.

For example, if one person waited until they were 35 to buy hospital cover and has an LHC loading of 10%, but their partner waited until they were 50 has a loading of 40%, the joint premium would be 25% higher.

What if I need a break in cover?

If you bought private hospital insurance after your base day, you'll need to hold cover for 10 continuous years before the fee is removed.

However, you are allowed a certain number of days cover-free. These are known as 'days of absence' and you're allowed a total of 1,094 days (almost three years) across 10 years.

Permitted days include:

  • Temporary gaps in cover. If you're switching from one health fund to another, any uncovered period counts towards your days of absence.
  • Temporarily suspending membership. If your fund approves a suspension for overseas travel, that period is not deducted from your days of absence.
  • Going overseas for an extended period. If you cancel your cover to travel overseas for a year or more, no days of absence are deducted. You can even travel back to Australia and still be considered overseas, providing your stay doesn't exceed 90 days.

Find hospital insurance and avoid LHC loading

If you're looking to avoid Lifetime Health Cover loading, the tool below can help you find a policy that works. Choosing 'basic cover with low premiums' and selecting 'hospital only' will give you a list of cheap policies that still stop the penalty.


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