Lifetime Health Cover
Lifetime Health Cover (LHC) is a Government initiative designed to encourage people to take out hospital insurance earlier in life and to maintain their cover.
Who pays LHC?
If you do not have hospital cover with an Australian registered health fund on the 1st of July following your 31st birthday and then decide to take out hospital cover later in life, you will pay a 2% loading on top of your premium for every year you are aged over 30.
For example, if you take out hospital cover at age 40 you will pay 20% more than someone who first took out hospital cover at age 30. The maximum loading is 70%.
Once you have paid a LHC loading on your private hospital insurance for 10 continuous years, the loading is removed as long as you retain your hospital cover.
You can use the Lifetime Health Cover calculators to find out if you need to pay the LHC loading.
Overseas Visitors Health Cover, Overseas Student Health Cover and international forms of insurance are not considered to be hospital cover for Lifetime Health Cover purposes.
- 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 2% loading on rejoining private hospital cover. The loading will increase by 2% for every year after that without cover.
You can only access your Days of Absence if you have held hospital cover at some point on or after your Lifetime Health cover base day. For most people, your base day is the later of 1 July 2000 or the 1 July after your 31st birthday.
- Suspension of membership - if you apply to your health fund to suspend your hospital cover for a short period, and it agrees, this period of suspension does not affect your LHC loading (you are considered to be maintaining your cover).
- Going overseas - if you cancel your hospital insurance in order to go overseas, the days you spend outside of Australia aren't counted towards the 1094 days you are allowed to be without private health insurance, provided you stay overseas for at least one continuous year. You are able to return to Australia for periods of up to 90 consecutive days, per visit, and are still considered to be overseas.
- New migrants to Australia - as a new migrant to Australia, if you are aged 31 or over, you will not have to pay a Lifetime Health Cover loading if you take out private hospital insurance within 12 months of being registered for Medicare. However if you are subsequently overseas on the day 12 months after your Medicare registration, and if you registered with Medicare on or after 1 July 2009, then you will not have to pay a Lifetime Health Cover loading if you purchase hospital cover within 12 months of your return to Australia.
After this time you will have to pay 2% more for each year you are aged over 30 when you take out private health insurance.
Who is exempt from LHC?
If you were born on or before 1 July 1934, you are exempt from LHC. You can join a health insurer at any time in the future and pay the same premium as someone who takes out cover at age 30.
- Overseas on the 1st of July following your 31st birthday - if you are an Australian citizen or permanent resident who is overseas on the 1st of July following your 31st birthday, you will not pay a Lifetime Health Cover loading if you purchase hospital cover by the first anniversary of the day you return to Australia. You are able to return to Australia for periods of up to 90 consecutive days, per visit, and are still considered to be overseas.
- Over 31 and overseas on 1 July 2000 - if you were an Australian citizen or permanent resident who was aged over 31 and overseas on 1 July 2000, then on your return to Australia you have up to 1094 'Days of Absence' to purchase private hospital cover without paying a loading. This 1094 day limit is a lifetime limit and cannot be renewed; if in future you have any breaks in your cover while living in Australia, the time spent without cover will also be deducted from this period. You are able to return to Australia for periods of 90 consecutive days, per visit, and are still considered to be overseas.
- Norfolk Island - time spent on Norfolk Island is classified as time spent overseas and this can have different effects depending on the actual dates you were resident on Norfolk Island.
- Australian Defence Forces (ADF) - if you are a member of the Australian Defence Forces (ADF) your medical services are provided by the ADF, so you are considered to have hospital cover.
If you discharge from the ADF after the 1st of July following your 31st birthday, you have 1094 days to join a health fund and still pay the base rate premium. If you discharge from the ADF before the 1st of July following your 31st birthday, then the normal rules apply.
- Department of Veterans' Affairs (DVA) - if you hold a Department of Veterans' Affairs (DVA) Gold Card you are considered to have hospital cover. If you have held a Gold Card at any time since 1 July 1999, and the card was subsequently withdrawn by the DVA, you may claim the period you held the card as a period with private health insurance.