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What is Lifetime Health Cover loading?

Lifetime Health Cover (LHC) loading is an Australian Government initiative that aims to encourage Australians to take out and maintain a private hospital policy earlier in life. If applicable to you, the loading increases the cost of your hospital policy premiums by a percentage of your base rate for each year that you don’t hold cover following your base day.

If you purchase an eligible hospital policy before 1 July following your 31st birthday and continue to hold cover, you won’t incur the LHC loading for the length of time you hold hospital insurance.

How does Lifetime Health Cover loading work?

LHC loading accrues at 2% every year that you don’t hold hospital cover after 1 July following your 31st birthday (your LHC base day). To avoid loading, you need to take out hospital cover before this date.

The maximum LHC loading is 70%. If applicable to you, the LHC loading will be added to the base premium of your hospital policy. This means that you will pay the loading each time you pay for your private hospital cover.

For an example of how LHC loading works, at the age of 40, you would need to pay 20% more for your hospital premium if you hadn’t held hospital cover at any point since 1 July following your 31st birthday.

Once you’ve held hospital insurance for 10 continuous years, any applicable loading will be removed. If you cancel your hospital cover after these 10 years and use up all your permitted Days of Absence, the loading will start again at 2% for every year you are without cover.

You turn 31. Happy Birthday!

You can either take out a hospital policy before 1 July following your 31st birthday, and LHC loading won’t start accruing if you continue to hold your policy…


You don’t take out a hospital policy.

As such, your LHC loading starts accruing at 2% every year until you take out cover or until the loading hits the 70% cap (whichever occurs first).

Five years later, you decide to take out hospital cover for the first time. Your LHC loading is 12% and is charged on top of your hospital policy base premiums.

Once you hold cover continuously for 10 years, LHC loading no longer applies (if you continue to hold cover).

What if I’ve missed my LHC loading deadline?

Even if you’re one day late in taking out cover (e.g. 2 July after your 31st birthday), you’ll still accrue a 2% loading. If you take out cover a year later, your loading will be even higher.

Here’s how much more you may need to pay annually if you’ve never had cover and take out a $1,800 policy at the following ages:

AgeYour LHC loading (%)How much extra you’ll pay annually*
6570% (the cap)$1,260
Based on a hospital policy that costs $1,800 each year (before the rebate is applied).

If you take out cover by 1 July following your 31st birthday, you’ll pay the base rate premium (i.e. the price quoted by health funds), minus any rebates or discounts that you’re eligible for. This price won’t be affected by LHC as long as you hold some form of hospital cover, even if you switch policies or funds.

Can I take a break from being covered once I’m older than 31?

Yes, you’re granted 1,094 permitted Days of Absence that you can use if you’re unable to maintain continuous hospital cover. LHC loading won’t start accruing within this grace period, and your current loading (if any) won’t be affected. However, there’s only one set of 1,094 days you’re granted, which never refreshes – once it’s used up, that’s it.

Once you’ve used up your Days of Absence, LHC loading will start accruing again at a rate of 2% for every year you didn’t hold hospital cover after 1 July following your 31st birthday.

What does ‘Days of Absence’ mean?

Days of Absence refers to the period where you can take a break from hospital cover and not accrue any LHC loading. This period totals 1,094 days (one day less than three years) throughout your lifetime.

If you use up your Days of Absence and don’t have a hospital policy, you will likely pay an LHC loading of 2% of your base premiums for each year you didn’t hold hospital cover after 1 July following your 31st birthday.

How does LHC loading work when you take a break from cover?

Example one:

Let’s say you’re 39 years old. You’ve held your hospital policy continuously since you were 29 and therefore haven’t accrued any LHC loading.

You then take a break from your cover for two years (730 days) before resuming cover. As you haven’t used up all your Days of Absence, you haven’t accrued any LHC loading. Keep in mind that if you take another break, you’ll only have 364 permitted days before you’ll start accruing LHC loading.

Example two:

You’re 41 and already paying a 6% loading on your policy, as you didn’t take out cover by 1 July following your 31st birthday.

You’ve held cover continuously for the last eight years but decide to take a break – and you end up using all your Days of Absence. Once this grace period lapses, your LHC loading increases to an 8% loading.

If you’re already paying the loading, be aware that breaks in cover don’t count towards your 10 years of continuous cover. If you use up all your permitted Days of Absence, you’ll have to restart your 10 years of continuous cover from the date you resume cover.

Special circumstances and exemptions from LHC loading

You may be eligible for an LHC loading exemption or delay if you fall under one or more of the categories below:

  • Australian citizens or permanent residents who were overseas at the time of the deadline are exempt from the loading, provided they take out hospital cover within 12 months of their return. You may need to provide your new health fund with an International Movement Record to establish that you were previously abroad and therefore do not owe any LHC loading.
  • New migrants aged 31 or over are not required to pay LHC so long as they take out hospital cover within 12 months of becoming eligible for Medicare.
  • Current members of the Australian Defence Force (ADF) have their healthcare expenses taken care of by the ADF and therefore don’t need to pay LHC. Once they leave the ADF, they’ll begin to attract LHC loading after 1,094 days if they’re over 31; if they’re under 31, they’ll be treated the same as any other Australian citizen in relation to their LHC loading.
  • Department of Veteran Affairs Gold Card holders don’t pay LHC, as they’re considered covered by an equivalent hospital policy.
  • Anyone born on or before 1 July 1934 is exempt from LHC.
  • Norfolk Island residents who were living on Norfolk Island before 1 July 2016 are considered as having spent time overseas, so were exempt from the loading until 12 months after your return to Australia. However, since 1 July 2016, time spent in Norfolk Island is considered time spent in Australia. If you’re over 31, your LHC loading is based on the age you are when you take out cover.

More frequently asked questions about LHC loading

Does my LHC loading transfer to my new policy when I switch health insurance?

Yes, it does. You’ll need to ask your current health fund for a Clearance Certificate, which details any previous LHC loading (if applicable), as well as the finer details of your cover like the type, level, join date, claims history and waiting periods served. This is so you can pass it on to your new health fund when asked. Alternatively, if you provide your new health fund with your previous health fund’s details, they will be able to request this information on your behalf.

Can I avoid the LHC if I have an extras-only policy or ambulance cover?

No, LHC only applies to hospital cover. Holding standalone extras cover (also known as general treatment or ancillaries cover) and ambulance cover doesn’t stop you from accruing LHC loading.

To avoid LHC loading on your hospital cover premiums, you must hold hospital cover with a complying health fund by 1 July following your 31st birthday.

You may also fall under an LHC loading exemption category, in which case you might not be required to take out cover immediately, if at all.

How are couples and families affected by LHC loading?

If you and your partner have accrued LHC loading, your loading will be averaged between both of you. So, if you have 20% loading and your partner has a 10% loading, your policy would attract a 15% loading.

Family policies work in the same way. If you and your partner have any LHC loading applicable, it’ll be averaged between the two of you. If you’re a single parent with a family policy, you’ll only pay your applicable LHC loading.

What happens if I don’t have hospital cover and will be overseas on my LHC base day?

If you’re an Australian resident and will be overseas on 1 July following your 31st birthday, you have a 12-month grace period to purchase hospital cover before attracting LHC loading. This grace period starts from the day you arrive back in Australia.

For any return visits you make to Australia for up to 90 consecutive days, you’ll still be considered overseas for LHC purposes. If you’re in Australia for more than 90 consecutive days, your 12-month grace period will commence from the date you return.

If you don’t purchase hospital cover before this grace period ends, you’ll be charged LHC loading as per usual if you didn’t take out hospital cover during the grace period.

Can I pause my hospital cover when overseas to avoid LHC loading?

If you’re heading overseas for a short period, you can reach out to your fund and apply to suspend your membership. If your fund agrees, this suspension period won’t count towards your 1,094 Days of Absence.

This suspension period will be treated as if you still hold cover, and you’ll not accrue any LHC loading. As this can vary between providers, though, it’s important you talk to your fund before suspending cover.

You can also cancel your hospital cover if you’re going to be overseas for at least 12 months, and it won’t be counted towards your 1,094 Days of Absence. Any return visits to Australia that are longer than 90 consecutive days will be deducted from this 1,094-day period.

Will I be charged LHC loading if I’m over 31 and moving to Australia as a permanent resident?

If you move to Australia after 1 July following your 31st birthday and take out hospital cover within one year of becoming eligible for full Medicare benefits (a green or blue Medicare card), you won’t be charged LHC loading.

However, if you don’t purchase hospital cover within this one-year timeframe, you’ll be charged the full LHC loading that applies to you – that is, a 2% loading for each year after 1 July following your 31st birthday you didn’t have a hospital policy from a complying Australian health fund.

For example, if you’re 35 and didn’t take out health insurance within one year of becoming eligible for Medicare but are looking to take it out now, you would be charged an LHC loading of 10% on top of your hospital insurance premiums.

How does LHC loading impact your Private Health Insurance Rebate?

The LHC loading you pay each year doesn’t count towards the Australian Government Rebate. This means you cannot claim the LHC loading portion of your premiums as a reduced premium or as a part of your yearly tax return.

What other charges or loadings should I consider?

You may need to pay a Medicare Levy Surcharge (MLS) if you earn over $93,000 a year as a single or $186,000 a year as a couple or family (From 1 July 2023). This is a tax charged on higher-income earners who don’t have private hospital cover. To see how you could be affected, try our Medicare Levy Surcharge calculator.

Tips on Lifetime Health cover loading from our health insurance expert, Lana Hambilton

  1. If you’ve taken ‘time out’ from having private health cover, some funds will allow the waiting periods you served with your previous fund to transfer across, despite having a gap in cover. Check the fund’s policy brochure, as it’s usually only applicable within a small window (e.g. 30 days since you last held cover).
  2. When you’re young and healthy, it can be tempting to cover just ‘the basics’, such as accident only cover. However, you may find that the price difference between Basic and Bronze coverage isn’t much over the course of a year, and it will cover you for hundreds more procedures.
  3. Over time, your needs may change. The great thing about private health insurance is you can upgrade your policy at any time and simply serve the relevant waiting periods.

So, should I take out a hospital policy before 31?

Whether or not you take out cover is a decision you’ll need to come to on your own. However, we believe that this type of health insurance can be invaluable to Australians, even to those who are younger.

With cover, you can:

  • Be treated as a private patient in a public or private hospital
  • Have your own room (if available)
  • Choose your preferred doctor
  • Avoid long public hospital waiting lists for treatment.

If you think you’ll eventually want private hospital insurance in the future, avoiding the LHC loading now could be a smart move.

To make finding cover simple, try our health insurance comparison tool. Our handy service lets you easily compare policies from some of Australia’s top insurers in one place.

We break down cover features, premiums, excess options and whether LHC loading might apply to you so that you can make a more informed decision.

If you’d prefer to talk through your options, you can always get in touch with our health insurance experts on the phone.

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