What is Lifetime Health Cover?
Lifetime Health Cover involves a financial loading (LHC loading) on your private health insurance hospital cover (hospital cover). It is designed to encourage people to take out hospital cover earlier in life, and to maintain their cover. If you take out hospital cover earlier in life, and keep it, you will pay lower premiums compared to someone who joins when they’re older.
If you don’t want to pay a LHC loading you need to buy hospital cover with an Australian registered health insurer before your LHC deadline. Your deadline is 1 July following your 31st birthday or, for new migrants over the age of 31, 12 months from the day you registered for Medicare.
LHC loadings apply only to hospital cover. They do not apply to private health insurance general treatment cover (also known as ancillary cover or extras).
If you are a new migrant to Australia, and are aged over the LHC deadline (1 July following your 31st birthday), special conditions apply. As a new migrant to Australia you do not have to pay a LHC loading if you take out hospital cover within 12 months of being registered for Medicare. After this time you have to pay a LHC loading of two per cent more for each year you are aged over 30 when you take out hospital cover. As a migrant it is a good idea to consider taking out hospital cover in the first year after you register for Medicare. If you wait and take out hospital cover after this date you will pay more for your hospital cover as the price will also include the LHC loading.
What if I miss my Lifetime Health Cover loading deadline?
If you take out hospital cover after your LHC loading deadline you will have to pay a LHC loading of two per cent for every year you are over 30. If you maintain continuous hospital cover for 10 years the LHC loading is removed and you will no longer have to pay the LHC loading on your hospital cover. However, if you choose to cancel your hospital cover then take it out again later you may have to pay a LHC loading when you rejoin.
- Hanh is aged 35 and she migrates to Australia on 1 March 2008. She has a permanent residency visa and she is eligible for Medicare. She applies for a Medicare card on 1 April 2008. If she takes out hospital cover before 1 April 2009, she pays no LHC loading. If Hanh delays purchasing hospital cover until after 1 April 2009 (one year after she applied for her Medicare card) a LHC loading based on her age is applied (two per cent for every year she is over the age of 30 at the time she takes out hospital cover). The important date is the date that Department of Human Services - Medicare accepts her application for a Medicare card.
- Javier is aged 35 and he migrates to Australia on 1 March 2008. He has a temporary residency visa and is not eligible for Medicare. On 1 May 2010 he is accepted as an applicant for permanent residency and becomes eligible for Medicare. Javier applies for a Medicare card on 1 June 2010 and is given a blue Interim Medicare card. If he takes out hospital cover before 1 June 2011, no LHC loading applies. If Javier delays until after 1 June 2011, a LHC loading based on his age is applied. The important date is the date that Department of Human Services - Medicare accepts his application for a Medicare card.
- Ilango is aged 25 and he migrates to Australia. LHC loadings do not apply to people until 1 July following their 31st birthday. Ilango has several years until 1 July following his 31st birthday to take out hospital cover without paying the LHC loading.
Are there any other special circumstances?
If you are overseas on your LHC loading deadline (i.e. the first anniversary of the day you were registered for Medicare), you will not pay a LHC loading if you purchase hospital cover within 12 months of the day you return to Australia. You are able to return to Australia for periods of up to 90 consecutive days, and are still considered to be overseas.
Where can I find out more about Lifetime Health Cover?
There is a government website that provides information on private health insurance and Lifetime Health Cover. The web address for this site is: www.privatehealth.gov.au. Alternatively, you can email the Department of Health at PHI@health.gov.au.