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3 in 4 Aussies who pay lifetime health cover loading say they want health insurance risk rated

4 min read
13 Jun 2018

New research reveals that 71 per cent of Aussies who pay the Lifetime Health Cover (LHC) loading on their health insurance want to see health cover risk-rated. This would mean those with existing health conditions would have to pay more for private care.

The findings come from a survey of an independent, nationally representative panel of 1,500 adults with private health insurance, commissioned by leading insurance comparison service[1]

LHC is an additional 2 per cent cumulative annual loading for Australians that take out health insurance for the first time after 1 July following their 31st birthday. It was introduced to encourage Australians to purchase hospital cover earlier in life and maintain it, thereby boosting and improving the risk profile of health insurance membership and supporting the principles of community rating.[2] This ultimately means that people with poor health aren’t penalised by higher premiums.

However, the reason behind LHC’s introduction isn’t valued by the majority of our survey respondents who pay the loading, particularly those in the 18 to 34 year old age group, with 80 per cent saying they should pay less because of their good health even if it meant people in poor health had to pay more. This compares with less than half (46 per cent) of the over-65 year olds.

LHC remains a confusing topic for many health insurance policyholders, with two in five (41 per cent) respondents unaware if they themselves paid a loading on top of their premiums. Half (49 per cent) of people admit being in the dark as to why it was introduced in the first place, and three in five (62 per cent) were unaware that health insurance isn’t risk-rated.

Household savings and health insurance expert at, Abigail Koch, said: “Community-rated health insurance, which means everyone pays the same base premium no matter their age or health status, helps subsidise the cost of private care for older Australians, and those with pre-existing conditions and ongoing health problems.

The LHC loading enables health funds to support the principles of community rating, by keeping health insurance policies more affordable for all Australians. However, our results show that the majority of policyholders would still prefer to see their insurance costs come down even if it meant that others with greater health needs would have to pay more,” said Abigail.

“There is a need for both the government and health funds to do more to educate Australians about Lifetime Health Cover and how it can affect the premiums you pay later in life. Those without health insurance who have just turned 31 should consider weighing up the benefits of taking out cover before 1 July this year. is a great place to start, with an abundance of information on health insurance readily available, with the added bonus of being able to compare and buy multiple policies in one place.”

Extra costs that Australians have to pay because of the LHC loading

According to’s analysis of recent APRA data, 12.2 per cent[3] of Australians pay some form of LHC loading, with the average weighted loading at 23.62 per cent[4]. The table below reveals how much more the average single and couple/family hospital policy would cost for Australians paying this average loading (23.62 per cent).

Hospital cover with LHC loading  
Policy typeAverage annual cost ($)[5] approx.Annual policy cost with the average LHC loading Additional amount Australians are paying
Single hospital only$2,349$2,904$555
Family/couple hospital only$4,075$5,038$963



About is an online comparison service that takes the hard work out of shopping around. We help Australians to quickly and easily compare and buy products from a wide range of providers. Our easy-to-use comparison tool enables consumers to find a product that best suits their needs and their back pocket. We’re also in the business of comparing personal finance products, utilities and can help find the lowest fuel prices in your area. Whether it’s car, health or home & contents insurance, we provide a completely free service, that empowers Australians to make buying decisions with greater trust, knowledge and savings. We’ve got your back, simples.


[1] Survey conducted by Pureprofile
[2] Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures):
[3] APRA, 2018, ‘Private Health Insurance Membership and Coverage March 2018’: (Tab T9) and APRA, May 2018, ‘Quarterly Private Health Insurance Statistics: March 2018’: (page 3)
[4] APRA, 2018, ‘Private Health Insurance Membership and Coverage March 2018’: (Tab T9)
[5] Research commissioned by and conducted by Ipsos MORI in January 2018

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avatar of author: Hannah Twiggs

Written by Hannah Twiggs

Hannah (or Twiggs as she's known by most of her colleagues) is a non-stop talker, avid snack eater, dog lover and passionate writer. When she's not chatting to journalists or writing up new story angles, Hannah enjoys a good Netflix binge, going away camping with friends and big brunches - preferably with extra bacon.

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