Lifetime health cover loading FAQs

Here are some common questions about Lifetime Health Cover Loading, relevant deadlines and how it can affect you:

  • What is Lifetime Health Cover (LHC) Loading?
  • What happens if I put off getting hospital cover?
  • What happens if you cancel your hospital cover?
  • How many days am I permitted to have without hospital cover?
  • What if I miss my lifetime health cover deadline?
  • How can you avoid the LHC loading?
  • Do extras/ancillaries count towards LHC loading?
  • Are there any special circumstances or exceptions?
  • What is Grace Period / 1094 days of absence?
  • What is the 90-day allowance?
  • What is a LHC ‘deadline day’?
  • Establishing your LHC loading
  • Where can I find out more about LHC?


WHAT IS LIFETIME HEALTH COVER (LHC) LOADING?

Lifetime Health Cover (LHC Loading) was introduced specifically for people aged over 31 (the deadline being 1st July following your 31st birthday). If you do not have Private Hospital Cover by this point, you will incur a 2% loading every year you don’t have cover. This is added to the cost of your insurance and increases each year until it reaches a maximum of 70%.


Note: Your loading does not continue to grow. Once you take out Private Hospital Cover, your loading is then locked in at this percentage and will not continue to grow (as long as you have no further gaps in your cover).

After holding cover for 10 continuous years the loading will automatically be removed from your premium.


WHAT HAPPENS IF I PUT OFF GETTING HOSPITAL COVER?

A 2% loading will apply for every year you do not have Private Hospital Cover after the age of 30. The maximum loading is 70% (keep in mind, your loading is locked in and will not continue to rise, as long as you have no further gaps in your cover). LHC Loading is added to your premium every year and is continuous for 10 years.

After holding cover for 10 continuous years the loading will automatically be removed from your premium.


WHAT HAPPENS IF YOU CANCEL YOUR HOSPITAL COVER?

You will incur a LHC Loading when re-joining Private Hospital Cover. This loading is additional to any previous loading and will continue to rise by 2% a year to a maximum of 70%. Days of absence will be used in this time. You have 1094 days (3 years minus one day) that you can be uncovered without incurring additional loading.


Note: Your loading is locked in and will not continue to rise, as long as you have no further gaps in your cover.


PERMITTED DAYS WITHOUT HOSPITAL COVER

If you have taken up hospital cover on or after your LHC ‘deadline day’, then you can access the following 'permitted days without hospital cover' during which you do not have an active hospital policy, but your loading does not increase. For most people, your deadline day is the later of 1 July 2000 or 1 July after your 31st birthday. 

  • Gaps in cover – to cover small gaps, such as switching from one fund to another, you are able to be without hospital cover for periods totalling 1094 days (i.e. three years less one day) during your lifetime, without affecting your loading. This is known as 'Days of Absence'.
    If you use up your Days of Absence - that is, you have a total gap period of 1095 days - you will pay a loading on re-joining private hospital cover. The loading is an additional 2% on top of any previous loading, and will increase by 2% for every year after the 1094 days without cover. 
  • Suspension of membership – if you apply to your health fund to suspend your hospital cover for a short period (for example, to travel overseas for a holiday), and the fund agrees, this period of suspension is not counted towards your 1094 days of absence. Suspension terms and conditions vary from fund to fund, so check with your fund as to whether you can suspend your policy.
  • Going overseas – if you cancel your hospital insurance after your LHC ‘base day’ in order to go overseas for at least one continuous year, the days you spend outside of Australia are not counted towards the 1094 Days of Absence. 

You are able to return to Australia for periods of up to 90 consecutive days, per visit, and are still considered to be overseas. Any periods of 90 days or more which you spend in Australia will be deducted from the 1094 Days of Absence.


WHAT IF I MISS MY LHC DEADLINE?

The LHC Loading deadline day depends on your situation. If the deadline is missed you will incur a 2% loading for every year you haven’t had it from the age of 30. The maximum loading you can incur is 70%.


HOW CAN YOU AVOID THE LHC LOADING? 

You must take up Private Hospital Cover before your LHC Deadline Day (1st of July following your 31st birthday). Find out more about your LHC Deadline Day here.

If you do not take up Private Hospital Cover before your LHC Deadline Day, you will incur a LHC loading of 2% for every year you are aged over 30, up to a maximum of 70%. This amount is added to your premium every year, for ten years.


Note: Your loading does not continue to grow. This is locked in for the time period you have Private Hospital Cover to a maximum of 10 continuous years (as long as you have no further gaps in your cover). You stop paying the loading after you have had Private Hospital cover for 10 continuous years.


DO EXTRAS & ANCILLARIES COUNT TOWARDS LHC LOADING?

No. Extras cover (also referred to as ‘ancillaries’) are optional and do not count as appropriate cover.


 

ARE THERE ANY SPECIAL CIRCUMSTANCES OR EXCEPTIONS?

If you are born before 1 July 1934 – you are exempt for LHC. You can join private health cover at any stage and you will pay the same premium as someone who took out cover at the age of 30 or below.


If you are a member of the Australian Defence Force (ADA) you are considered to have appropriate level of hospital cover and therefore do not need to take up additional cover.

  • If you are discharged before your 31st birthday, normal rules apply.
  • After your 31st birthday, you will have 1094 days to join a fund without incurring LHC loading.
  • After your 31st birthday, and already had LHC loading prior to joining the ADA, your loading will return to what it was previously.


If you were overseas on the 1st of July following your 31st birthday, you have one year (from the anniversary of the day you arrived) before you are required to have Private Hospital Cover. 


If you lived in Norfolk Island before 1 July 2016 you are classified as living overseas.  After 1 July 2016 Norfolk Island residents were made eligible for Medicare and therefore are subject to normal rules – if are aged over 31, as of 1 July following your 31st birthday you are required to have Private Hospital Cover. 


Norfolk Island residents who were aged over 31 had a 12-month grace period, to 1 July 2017, to purchase insurance without incurring a LCH Loading; if purchasing from or after 1 July 2017, a loading will apply based on their age at the time of joining. (For younger residents, they will have until their normal LHC base day of the 1 July following their 31st birthday to purchase insurance without incurring a loading.) 


Residents of Norfolk Island are subject to pricing and premiums of those in NSW.

If you are over 31 and overseas on 1 July 2000, you are not subject to loading if you take up Private Hospital Cover when you return to Australia. However, after 90 consecutive days at any stage of being back in the country you will start to use your Grace Period (this is called the 90-day allowance). If you exceed your Grace Period of 1094 days you will incur a 2% loading every year after that without cover. Any visits to Australia less than 90 consecutive days do not count against Grace Period (1094 days).


Have you moved to Australia? – You must take up Private Hospital Cover before your LHC Deadline Day. Your Deadline Day is from 1st July following your 31st birthday or within 12 months of registering for Medicare, whichever is later. If you do not take up Private Hospital Cover before your LHC Deadline Day you will incur a LHC loading of 2% for every year you are aged over 30.

However, if you are subsequently overseas on your LHC deadline day and if you registered with Medicare on or after 1 July 2009, then you will not have to pay a LHC loading if you purchase hospital cover within 12 months of your return to Australia. The anniversary of your return to Australia becomes your new LHC deadline day.

If you miss your LHC deadline day or delay purchasing private hospital cover for more than 12 months after registering, you will have to pay 2% more in addition to your hospital cover premium for each year you are aged over 30 when you take out private health insurance.


You can confirm the applicable date by requesting a letter from Medicare - contact Medicare (Department of Human Services) or visit your local Medicare branch.


If you hold a Department of Veterans’ Affair (DVA) Gold Card you are considered to have appropriate hospital cover and therefore do not need to take up additional cover. 


WHAT IS GRACE PERIOD / 1094 DAYS OF ABSENCE?

Once you’ve taken up private hospital cover and maintained a membership for a minimum of 12-months, you can cancel it for up to 1094 days (3 years minus 1 day) during your life, without it affecting your loading.


WHAT IS THE 90-DAY ALLOWANCE?

If you cancel your Private Hospital Cover to live overseas, you can return to Australia for up to 90 consecutive days, per visit without using days from your Grace Period (1094 Days of Absence).


WHAT IS A LHC ‘DEADLINE DAY’?

Your LHC ‘Deadline Day’ is the exact deadline date in which you should have Private Hospital Cover. For most people (please see exemptions) this is 1st July following your 31st birthday.


ESTABLISHING YOUR LHC LOADING

If you are transferring between private health funds or joining as a new member, in some circumstances you may need to supply supporting documents to your new health fund to have the correct loading applied. 

Depending on your circumstances, you may need to obtain one or more of the following:


Clearance Certificate – if you are transferring between private health funds or re-joining private health insurance after a period of absence, you should obtain a Clearance Certificate from your previous health fund and provide this to your new health fund on or after joining. This will establish your previous LHC Loading, if any; and if transferring between funds, will also provide information about waiting periods you have already completed. You can find contact details for any health fund on this website.


If you registered with Medicare on or after 1 July 2009 and you were overseas on the anniversary of your Medicare registration, then you should also obtain an International Movement Record (see below).


International Movement Record – if you are aged over 31 an International Movement Certificate is needed to confirm entry and/or exit from Australia document if: 

  • you were overseas on the 1 July following your 31st birthday, and you intend to purchase or have purchased private hospital cover within 1 year of your return
  • you were aged over 31 and overseas on 1 July 2000, and you intend to purchase or have purchased private hospital cover at any time after your return
  • you are a new Australian migrant who was aged over 31, you registered with Medicare on or after 1 July 2009, and you were overseas on the anniversary of your Medicare registration date, and you intend to purchase or have purchased private hospital cover within a year of your return (in this case, you should also obtain a Medicare Registration date letter)
  • you cancelled your hospital cover after the age of 31 and after 1 July 2000, and then went overseas for a period of at least 12 months, and you now intend to purchase or have purchased private hospital cover at any time after your return (in this case, you should also obtain a Clearance Certificate).


To confirm your entry and exit dates from Australia you can request an International Movement Record from the Department of Home Affairs. The application form (Form 1359) can be downloaded online. 


When you have received the record from Home Affairs, supply it to your health fund on or after joining to have your LHC loading reassessed. 

Medicare Registration Date Letter? If you have moved to Australia and are aged over 31, you have one year from the date you registered for Medicare to take up Private Health Cover without being penalised. The Medicare registration letter confirms the date you were first registered so your LHC Loading can be adjusted.


WHERE CAN I FOUND OUT MORE ABOUT LHC?

There is a government website that provides information on private health insurance and Lifetime Health Cover. Alternatively, you can call the toll free line of the Department of Health and Ageing on 1800 020 103. 


Source: www.privatehealth.gov.au/healthinsurance/incentivessurcharges/lifetimehealthcover.htm