Lifetime Health Cover Loading and why you need Health Insurance before age 31
Ben Thomas,
Customer Experience Manager
Health Insurance Expert, who’d sign up for that job title? Ben Thomas did in 2008 and hasn’t looked back.

If you don’t take out private hospital cover before you turn 31, but do take it out later in life, you’ll be faced with a 2% loading on top of your policy premium for each year that you didn’t have cover.


What is Lifetime Health Cover loading?

The Lifetime Health Cover (LHC) loading initiative was introduced by the Federal Government on 1 July 2000 to encourage more Australians to take out hospital insurance earlier in life and reduce the pressure on the public hospital system.

If you don’t take out private hospital cover before you turn 31, but do take it out later in life, you’ll be faced with a 2% loading on top of your policy premium for each year that you didn’t have cover.

For example, if you wait until you’re 34 to arrange private hospital cover for the first time, you could pay an additional 8% on top of your premium (2% per year x 4 years).

Wait until you’re 50 to get hospital cover and your LHC loading could be 40% on top of your annual premium payment.

The maximum LHC loading that can be charged to you as an individual is 70%. Those born before 1 July 1934 are exempt from paying LHC loading.

How is Lifetime Health Cover loading calculated?

For those with a couples or family policy, your loading percentage is calculated as an average between the individual loading of the adults covered. For example, if one policy holder has a 20% loading and the other policy holder has 0% loading, the total LHC loading applied to the joint policy is 10%.

The Government’s website includes a handy tool that calculates whether the LHC loading applies to you. When using the tool, if you’re trying to calculate your LHC as a couple or family then you’ll need to work through it once for yourself and once for your partner.

How do you pay the loading?

If you’re required to pay the LHC loading, your health fund includes it as part of your premium. The health fund then passes those funds to the Government.

The LHC loading only applies on the hospital component of your cover and not on your extras.

Does the loading last forever?

If you have to pay LHC loading, the good news is that it doesn’t last forever. Once you’ve continuously held a hospital cover policy for 10 years, the loading is removed and you don’t have to pay it again provided you maintain your hospital cover.

What happens if you cancel or suspend your hospital cover?

You can drop or suspend your hospital cover policy for a total sum of three years (1094 days) during your lifetime without incurring any change to your Lifetime Health Cover loading status. In most cases, if you drop your policy for longer than a total of 1094 days you’ll be required to pay a higher LHC loading fee when you take out hospital cover again in the future.

The ‘permitted days without hospital cover‘ where your loading will not increase if you don’t have an active private health insurance hospital cover policy include:

  • Small gaps in your hospital cover, such as cancelling your cover with one fund and re-starting it with another a short time later. These gaps count towards the 1094 days.
  • Suspending your hospital cover for a period of time, such as for an overseas holiday. This doesn’t count towards your 1094 days.
  • Cancelling your hospital cover to travel overseas for more than one year continuously. This includes any visits home for up to 90 days. This doesn’t count towards your 1094 days of absence, unless you spend more than 90 days consecutively in Australia.

How do you switch to a Members Own health fund without affecting your Lifetime Health Cover loading?

Switching to a Members Own health fund that better suits your circumstances and insurance needs without affecting your LHC loading is easy. Simply jump on our online comparison system and we’ll match you with a not-for-profit/mutual health provider and the best policy for you. When you use the online comparison system, keep in mind that we don’t include LHC loading in any of the prices displayed.

To avoid using up any of your ‘permitted days without hospital cover’, we recommend you keep your current cover active until the day you transfer to a Members Own health fund. We handle the policy transfer with your old fund and your LHC loading automatically moves with you to your new fund.