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‘You need to get hospital cover before you hit the big three-one!’

You might have heard that one before.

So, is it true? Does taking out cover by 1 of July following your 31st give you an advantage in your 30s – and beyond?

First, we need to break down why there’s such a ‘deadline’ to getting health insurance. This is where Lifetime Health Cover loading comes in.

What is Lifetime Health Cover loading?

Lifetime Health Cover (LHC) loading is an Australian Government initiative that aims to encourage Aussies to take out – and maintain – a private hospital policy earlier in life. If applicable to you, loading increases the cost of your hospital policy premiums.

If you purchase complying hospital cover before 1 July following your 31st birthday and continue to hold cover, you won’t incur the Lifetime Health Cover loading for the length of time you hold hospital insurance.

Overall, this initiative is designed to take the pressure off our strained public health system.

How does Lifetime Health Cover loading work?

LHC loading accrues at two per cent every year you don’t have hospital cover after 1 July following your 31st birthday. To avoid loading, you need to take out hospital cover before 1 July following your 31st birthday (or 1 July 2000, whichever is latest).

Loading is capped at 70%, and you’d only need to start paying it once you take out a hospital policy. If you never intend on taking out private hospital cover then you’ll never incur the LHC loading.

For example, 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.

You turn 31. Happy Birthday!

You take out a hospital policy before 1 July following your 31st birthday.

LHC loading doesn’t start accruing if you continue to hold this policy.


You don’t take out a hospital policy.

As such, your LHC loading starts accruing at two per cent 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. Your LHC loading is 12% and is charged on top of your hospital policy 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 (2 July after your 31st birthday), you’ll accrue that two per cent 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 lock in the lowest base rate premium (i.e. the price quoted by health funds). This price won’t be affected by LHC as long as you hold some form of hospital cover – even if you switch policies/funds.

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How can I remove my LHC loading?

By holding hospital insurance for 10 continuous years, any applicable loading will be removed, provided you maintain your hospital cover after this timeframe.

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

No, LHC only relates to hospital cover. Holding extras-only cover (also known as general treatment or ancillaries cover), and/or ambulance cover does not 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 31 birthday.

You may fall under an LHC loading exemption category, though.

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

Yes, you’re granted 1,094 ‘Days of Absence’ that you can use if you need to take a break from your cover. Within this grace period, LHC loading won’t start accruing – and your current loading (if any) won’t be affected.

However, once you’ve used up your ‘Days of Absence’, LHC loading will start accruing again at a rate of two per cent 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 a LHC loading of two per cent for each year you didn’t hold hospital cover after 1 July following your 31st birthday on your hospital base premiums.

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 a break again, you’ll only have 364 grace days before you’ll start accruing LHC loading.

Example two:

You’re 41 and already paying a six per cent 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 would increase to become an eight per cent loading. You take up cover again, so this loading doesn’t increase by another two per cent in the next year.

If you’ve already been paying the loading, be aware that breaks in cover do not count towards your 10 years of continuous cover.

young couple enjoying cooking together

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.

Special circumstances/exemptions from LHC loading

You may be eligible for an LHC loading exemption or a delay in loading if you fall under one or several groups outlined below:

  • Australian citizens or permanent residents who were overseas at the time of the deadlineare exempt from the loading, provided they take out hospital cover within 12 months of their return. They may need to provide their new health fund with an International Movement Record to establish that they were previously abroad, and therefore do not owe any LHC loading;
  • new migrants aged 31 or overare 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. Therefore, they 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 younger than 31, they’ll be treated the same as any other Australian citizen in relation to their LHC loading;
  • Department of Veteran Affairs Gold Card holdersdon’t pay LHC, as they’re considered covered by an equivalent hospital policy;
  • anyone born on or before 1 July, 1934is exempt from LHC; and
  • Norfolk Island residents. If you were living on Norfolk Island before 1 July 2016, the Australian Government saw you as spending time overseas. So, you were exempt from loading until 12 months of 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.

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

Yes. Ask your health fund for a Clearance Certificate, which details any previous LHC loading (if applicable), as well as the finer details of your cover (e.g. type, level, join date, claims history, waiting periods served etc.).

You’ll need to pass on this document to your new health fund when asked.

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;*
  • choose your preferred doctor;* and
  • avoid long public hospital waiting lists for treatment.

*If available.

If private hospital insurance is something you’ll eventually want for yourself, avoiding the LHC loading in the future could be a smart move.

To make finding great-value cover simple, turn to our health insurance comparison tool. Our handy service lets you easily compare policies from some of Australia’s top insurers – in the 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.

Frequently asked questions

Still have some burning questions about LHC? We’ve got you covered.

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 will still be considered overseas for LHC purposes. If you’re in Australia for longer than 90 consecutive days, your 12-month grace period will commence from the date you returned.

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 stop my hospital cover when overseas and 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, 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 start deducting from this 1,094-day period.

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

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 two per cent 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 were 35 and didn’t take out health insurance within one year of becoming eligible for Medicare, and you were 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 Private Health Insurance Rebate?

The LHC loading you pay each year doesn’t count towards your annual Private Health Insurance Rebate. This means you cannot claim any LHC loading you’ve paid in that year.

What other charges or loadings should I consider?

You may need to pay a Medicare Levy Surcharge (MLS) if you earn over $90,000 a year as a single, or $180,000 a year as a couple or family. 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.

So, what are you waiting for?

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