Lifetime Health cover (LHC) is a Federal Government initiative that came into effect on 1 July 2000. It is designed to reward people who join a private health fund earlier in life by securing lower premium payments.
How does it apply to me?
If you are eligible for Medicare and:
Under Lifetime Health cover, if you’re aged over 30 and don’t have hospital cover, then for each year you delay joining, your membership fees will increase. In fact, you will pay a loading of 2% on the base rate for every year you are aged over 30 to a maximum of 70%. Once you have stayed with private hospital cover for 10 continuous years and keep it, you stop paying that loading as a reward for commitment to the private health system.
By joining hospital cover as soon as possible, you can stop this continuous increase and your loading will be frozen at the rate that matched your age when you joined (known as your Certified Age at Entry or CAE). As long as you maintain your hospital cover, your loading percentage will continue to be set according to your CAE, and will not increase each year. People who took out and maintained a hospital cover dated prior to 1 July 2000 will pay a base rate premium regardless of their age. The following table outlines the premium increases applicable depending of your certified age of entry:
| Joining Age |
Premium Loading |
Joining Age |
Premium Loading |
|
30 or younger
|
0%
|
48
|
36%
|
|
31
|
2%
|
49
|
38%
|
|
32
|
4%
|
50
|
40%
|
|
33
|
6%
|
51
|
42%
|
|
34
|
8%
|
52
|
44%
|
|
35
|
10%
|
53
|
46%
|
|
36
|
12%
|
54
|
48%
|
|
37
|
14%
|
55
|
50%
|
|
38
|
16%
|
56
|
52%
|
|
39
|
18%
|
57
|
54%
|
|
40
|
20%
|
58
|
56%
|
|
41
|
22%
|
59
|
58%
|
|
42
|
24%
|
60
|
60%
|
|
43
|
26%
|
61
|
62%
|
|
44
|
28%
|
62
|
64%
|
|
45
|
30%
|
63
|
66%
|
|
46
|
32%
|
64
|
68%
|
|
47
|
34%
|
65
|
70%
|
If you are an Australian citizen or permanent resident who turns 31 after 1 January 2000, and are overseas on the 1st of July following your 31st birthday, you will not pay a Lifetime Health Cover loading as long as you purchase hospital cover within a year of your return to Australia. Transferring hospital cover from another registered fund, make sure you use your CAE (the age at which you joined), rather than the age you are now, to calculate the correct fee.
Under the Federal Government’s Lifetime Health cover legislation the loading of 2% does not apply to Extras cover.
Note: Due to Federal Government’s rounding rules for the rebate, actual premiums for hospital and/or extras coverage can vary from this calculation by up to 10 cents.
Provisions and Exemptions
There are a number of provisions that could apply to you to avoid or delay the application of the Lifetime Health Cover loading, such as:
- If you were born on or before 1 July 1934 you are exempt from Lifetime Health Cover and are able to join at any time without having to pay a loading on your premium.
- Australian Citizens and permanent residents currently living overseas or who have lived overseas at anytime between 1 January 2000 to 1 July 2000 inclusive or on July 2000.
- Recent migrants who have become eligible for Medicare Benefits (including migrants from New Zealand).
- Members of the Australian Defence Force.
- You are able to drop your hospital cover for a cumulative period of 24 months during your lifetime without affecting your loading. For every 365 days without cover after that, your loading will increase by 2%.
For more information on Lifetime Health Cover please visit the Department of Health and Ageing website at www.health.gov.au