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.

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.

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. 

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).

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!).

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 367 906. Your future self will probably thank you.