Push pin stuck on calendar date June 30

How does turning 31 affect health insurance?

Turning 31 soon with no health insurance? Find out what your 31st birthday means for your health insurance costs.

Lifetime Health Cover (LHC) is a Government initiative that encourages people to take out hospital insurance early in life and penalises those who fail to do so before their 31st birthday.

The aim of LHC is to encourage those who can afford private health care to take out cover earlier on in order to relieve the pressure on the public health system. LHC does not apply to those born on or before 1 July 1934 and it ceases after you’ve had continuous private hospital cover for 10 years.

Find out what policies are available and receive a quote

Details Features
High Hospital with $0 / $250/ $500 Excess Options
High Hospital with $0 / $250/ $500 Excess Options
Provides a high level of cover for hospital including pregnancy cover and assisted reproductive services.
  • Cover starting from $36.22 weekly
  • Two month waiting period for wisdom teeth
  • 65% back on extras
  • Choice of $0, $250 and $500 excess
Enquire Now More info
Premier Hospital
Premier Hospital
This top hospital policy covers you for a multitude of services as well as 100% of the cost of hospital accommodation and theatre fees in all HCI agreement hospitals and day surgery facilities.
  • Cover for pregnancy and IVF treatment
  • 100% back on surgically implanted prostheses
  • 100% back on hospital prescriptions
  • Access Gap Cover
Get Quote More info
GoldStar
GoldStar
Premium hospital cover with complete cover for hospital expenses. Save 4% when you pay for 12 months of your cover upfront.
  • All theatre fees covered
  • Unlimited maternity cover
  • Choose no excess or $200, $400, $500 per admission
Get Quote More info
Top hospital 500
Top hospital 500
Top hospital 500 provides cover for a comprehensive range of services from psych to obstetrics to the removal of tonsils.
  • Spinal fusion
  • Weight loss surgery
  • All joint replacements
  • Rehabilitation
Enquire Now More info
Mid Hospital with Pregnancy
Mid Hospital with Pregnancy
Mid Hospital with Pregnancy covers you for pregnancy and related services in addition to what the standard Mid Hospital policy covers.
  • Pregnancy and related services
  • Nine month waiting period for pregnancy in public hospital
  • 12 month waiting period for pregnancy in private hospital
  • Day surgeries
Enquire Now More info
Premium Family Package
Premium Family Package
This is GMHBA's most comprehensive policy and providing a range of benefits including a pregnancy option.
  • Pregnancy and birth related services
  • Assisted reproductive services (IVF)
  • No hospital excess for kids
  • 100% back on optical
Enquire Now More info
Premium Hospital Cover
Premium Hospital Cover
Comprehensive hospital protection with complete cover including pregnancy.
  • No excess for kids
  • No excess for accidents
  • Cover for pregnancy, heart surgery, joint investigations
  • Free access to health and wellbeing programs
Enquire Now More info
Top Hospital Cover
Top Hospital Cover
NIB's premier Hospital protection with cover for pregnancy and birth services, obesity surgery and all other benefits covered across other policies.
  • $250 / $500 excess
  • Pregnancy and birth services cover
  • Infertility Investigations cover
  • Renal dialysis cover
Enquire Now More info
Top Hospital with Top Extras
Top Hospital with Top Extras
Get comprehensive hospital and extras cover and tailor your policy to your needs.
  • Pregnancy and birth services cover
  • Back surgery cover
  • $1000 general dental annual limit
  • $600 physiotherapy annual limit
Enquire Now More info

How does turning 31 affect your health insurance?

Once you turn 31 you can be affected by the LHC loading, which impacts your health insurance premiums in the following way:

  • Adds 2% per year to the cost of your premiums for every year over the age of 31 that you don’t have private hospital cover.
  • This 2% loading increases every year that you don’t have cover until it reaches the maximum allowable threshold of 70%.
  • Once you have held continuous cover for ten years, the loading is removed altogether.

So, if you’re about to turn 31, this birthday has special significance for you, because if you fail to act now, you’re going to have to pay more for your private health insurance. If you have turned 31 recently don't panic, you have until 30 June following your birthday to take out cover so you may still have time.

The health insurance you take out doesn’t need to be comprehensive cover either, but must meet the criteria of:

  • Providing at least basic hospital cover.
  • Having an excess of no more than $500 for singles and $1,000 for families.

Why is June 30 important?

The date 30 June has special significance for two reasons:

  • It’s your last chance after your 31st birthday to avoid the LHC loading.
  • As this date is also the end of the financial year, taking out health cover can avoid paying more tax due to the Medicare Levy Surcharge (MLS).

The LHC loading has already been explained, but what is the Medicare Levy Surcharge (MLS)? Lets give you a breakdown:

  • The MLS is a tax of between 1% and 1.5% levied each year on those high income earners who don’t have hospital cover. So if you earn over $90,000 p.a. for a single or $180,000 p.a. for couples and families, taking out basic hospital cover can help you avoid this levy.
  • It’s charged on a pro-rata basis, so if you take out cover mid-way through the financial year, you will only be charged for the part of the year that you weren’t covered.
  • So, with 30 June being the end of the financial year, the sooner you take out cover before this date, the less tax you will be charged in the current financial year. You will also be protected from the levy in the next financial year and beyond once you have hospital cover.

How is the LHC loading calculated?

The LHC loading accumulates by 2% per year for every year above the age of 31 that you don’t have hospital cover. So, for example:

  • If you wait until you are 40 to take out cover, you will pay an additional 20% on your premiums.
  • If you wait until 50 and you will pay 40% more and so on.

If you take out a couples or family policy, the loading is averaged out between both policyholders. If one has an LHC loading of 10% and the other has 20%, the joint policy will attract an LHC loading of 15% (10% + 20% = 30%, divided by 2 = 15%).

To give you an idea of how this percentage increase translates into dollars out of your pocket, this chart shows the additional amounts you will pay at different ages if you delay taking out health insurance.

What is the Lifetime Health Cover Base Date?

This is the date from which the loading will be applied if you have not taken out an adequate hospital insurance policy, which is the 1st of July following your 31st birthday.

Is the private health insurance rebate affected?

The Private Health Rebate is a rebate given each year to taxpayers who have private health cover to assist them with the cost of their premiums. However, the portion of your premium that contains the LHC loading (e.g. 20% if you were 40 before you got private hospital cover) does not attract the rebate.

So, in effect, you are being penalised twice for not taking out cover at 31. The cumulative rebate that you will miss out on when added up over the years can be substantial, which is another good reason to avoid the LHC by taking out cover early in life.

Is anyone exempt from the LHC loading?

There are some circumstances in which you will not have to pay the LHC loading. These include:

  • If you had hospital cover on 1 July 2000 and you have maintained it since then.
  • If you were born on or before 1 July 1934, in which case you can take out health cover at any time and will not be charged the loading.
  • If you were aged 31 or older and were overseas on 1 July 2000, you are considered to have held private hospital insurance, and have 1,094 days once returned to Australia to purchase private hospital insurance without incurring the LHC loading.
  • If you are overseas on your LHC Base Day (1 July following your 31st birthday), you will not have to pay the LHC loading, as long as you take out hospital cover within a year of returning to Australia.
  • If you are a member of the Australian Defence Forces (ADF) or hold a Department of Veterans' Affairs (DVA) Gold Card, you do not have to pay the loading, as you are considered to have hospital cover.

Anything else I should be aware of?

The following are a few important details that you should know about the Lifetime Health Cover loading:

  • If you take out hospital cover on or before your 31st birthday, you will continue to avoid the LHC loading for as long as you maintain that cover (until 10 years of continuous cover, after which the loading will no longer apply).
  • You can be without hospital cover for small periods during that 10 years, as long as they don’t add up to more than 1,094 days in total (approximately three years).
  • Health insurance portability rules mean you can take your current LHC loading with you if you switch insurers, but you may need a Clearance Certificate showing your current LHC rate (your new insurer can usually take care of this for you).

Final words of advice regarding the LHC loading

In summary, here are the main tips to remember in relation to LHC loading:

  • The loading begins accruing at 2% per year for every year after your LHC Base Day that you don’t have hospital cover.
  • The loading ends after 10 continuous years of cover.
  • You cannot be without hospital cover during this time for more than 1,094 days in total.
  • The maximum you can be charged is 70%.
  • Your LHC rate travels with you between insurance providers.
  • The minimum hospital cover you will need to avoid the LHC loading must not have an excess of more than $500 for singles and $1,000 for families.
  • The loading is averaged out between both policyholders in a couples or family policy.
  • There is no Private Health Rebate for the portion of your premium that contains the LHC loading.

Compare health insurance options with an adviser and avoid the LHC loading

Which health funds in Australia can I get cover from?

Health fundWho can get health insurance with these funds?Find out more
HIF Logo
  • Open. Any Australian citizen or permanent resident is eligible to join. OVHC is available for those temporarily visiting or working in Australia.
More info
health.com.aulogo
  • Open. Any Australian citizen or permanent resident is eligible to join.
More info
ahmMore info
Australian UnityMore info
GMHBA
  • Open. Any Australian citizen or permanent resident is eligible to join.
More info
HCF
  • Open. Any Australian citizen or permanent resident is eligible to join. OVHC is available for those temporarily visiting or working in Australia.
More info
nib
  • Open. Any Australian citizen or permanent resident is eligible to join. OVHC and OSHC are available for those temporarily studying, visiting or working in Australia.
More info
Transport Health Logo
  • Open. Any Australian citizen or permanent resident is eligible to join.
More info
Bupa
  • Open. Any Australian citizen or permanent resident is eligible to join. OVHC and OSHC are available for those temporarily studying, visiting or working in Australia.
More info
cdhlogo
  • Open. Any Australian citizen or permanent resident is eligible to join.
More info
cua
  • Open. Any Australian citizen or permanent resident is eligible to join.
More info
Frank
  • Open. Any Australian citizen or permanent resident is eligible to join. OVHC is available for those temporarily visiting or working in Australia.
More info
gmflogo
  • Open. Any Australian citizen or permanent resident is eligible to join.
More info
GU Health
  • Open. Any Australian citizen or permanent resident is eligible to join. OVHC is available for those temporarily visiting or working in Australia.
More info
HBF
  • Open. Any Australian citizen or permanent resident is eligible to join. OVHC is available for those temporarily visiting or working in Australia.
More info
hcilogo
  • Open. Any Australian citizen or permanent resident is eligible to join.
More info
logo health partners
  • Open. Any Australian citizen or permanent resident is eligible to join.
More info
latrobehealthlogo
  • Open. Any Australian citizen or permanent resident is eligible to join.
More info
 medibank
  • Open. Any Australian citizen or permanent resident is eligible to join. OVHC and OSHC are available for those temporarily studying, visiting or working in Australia.
More info
mildurahealthfundlogo
  • Open. Any Australian citizen or permanent resident is eligible to join.
More info
onemedifundlogo
  • Open. Any Australian citizen or permanent resident is eligible to join.
More info
peoplecare provider page link
  • Open. Any Australian citizen or permanent resident is eligible to join. OSHC is available for those temporarily studying in Australia although it is only extras, not hospital cover.
More info
phoenix health fund provider link
  • Open. Any Australian citizen or permanent resident is eligible to join.
More info
queensland country health fund provider link
  • Open. Any Australian citizen or permanent resident who lives in Queensland or the Northern Territory is eligible to join.
More info
St. Lukes Health Logo
  • Open. Any Australian citizen or permanent resident is eligible to join. 
More info
westfund provider link
  • Open. Any Australian citizen or permanent resident is eligible to join.
More info
acahealthlogo
  • Restricted. Open to members of the Seventh-day Adventist Church and present and past employees of affiliated companies, along with the partners/spouses, dependents, siblings, parents and grandchildren of those mentioned previously.
More info
CBHS Health Fund Logo
  • Restricted. Open to employees, contractors and franchisees of Commonwealth Bank of Australia Group as well as their partners and family members, including dependent and non-dependent children, siblings, parents and grandchildren.
More info
defencehealthlogo
  • Restricted. Open to reservists and past members* of the Australian Defence Force, employees of the Department of Defence and Defence suppliers. Extended family as well as the ex-partner/spouse of those previously mentioned are also eligible to join.
More info
navyhealthlogo
  • Restricted. Open to current and former members, reservists and cadets of the ADF, employees of the DoD, Defence suppliers and more. Extended family as well as the ex-partner/spouse of those previously mentioned are also eligible to join.
More info
doctorshealthfundlogo
  • Restricted. Open to registered Medical Practitioners and Health Practitioners (in an eligible category), their employees, extended family and much more. The eligibility criteria for this fund is wide and you can view the full list via the More Info button.
More info
policehealthlogo
  • Restricted. Open to current or former (if retired or resigned after 1 Jan 2001) employees of state, territory and federal police departments/police unions including their partners/spouses, dependants and adult children plus their immediate family.
More info
rthealthlogo
  • Restricted. Open to current or former employees of Government or privately owned transport (air, sea, land) and energy generation/delivery entities, as well as those involved in administering them. Extended family of eligible members can also join.
More info
rbhslogo
  • Restricted. Open to current or former employees of the Reserve Bank of Australia and Note Printing Australia, as well as their current or ex-partner or spouse and their dependant or adult children.
More info
teachers
  • Restricted. Open to current or former members and administrative staff of approved education unions and organisations, along with their extended family. Use the More Info button to the right to view the eligible unions and organisations.
More info
tuh
  • Restricted. Open to current or former union members of any industry along with their current or ex partner/spouse, dependent children, adult children (plus their partner), siblings (plus their partners and dependent children), parents and grandchildren.
More info

Compare health insurance options with an adviser and avoid the LHC loading

Picture: Shutterstock

Richard Laycock

Richard is the senior insurance writer at finder.com.au and is on a mission to make insurance easier to understand.

Was this content helpful to you? No  Yes

Related Posts

Ask a Question

You are about to post a question on finder.com.au

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

Ask a question
feedback