Lifetime Health Cover
Lifetime Health Cover was designed by the Government to encourage
Australians to take out private health insurance earlier in life and
to maintain health insurance for the long term. When thinking about
your health insurance options you should be aware that this applies
only to hospital cover, not extras
The Australian government now requires people to take out private hospital
cover by the age of 31 - or age loading penalties start to
apply, and then increase each year you're not covered. To avoid
surcharges, you need to have private hospital cover by 1 July
following your 31st birthday.
How is Lifetime Health Cover calculated?
Lifetime Health Cover is calculated based on your Certified Age
at Entry (CAE), which is the age at which you first take out
hospital cover. If you take hospital cover on or before 1 July
following your 31st birthday, you will have a CAE of 30, which is
the lowest possible age of entry and entitles you to the lowest
(cheapest) base rate premium for as long as you continue to hold
Your CAE determines your age loading for the next 10 years. For
example, if you take out hospital cover at age 40, then your CAE
will be 40 for the next 10 years, and your age loading will be 20%
for each year of that period.
The good news is that even if you join hospital cover later in
life, if you keep your cover continuously for 10 years, your age
loading will be completely removed and your CAE restored to 30.
What if my partner and I have different age loadings?
If you and your partner take out couples or family cover but you have
different age loadings, your health fund will use the following
formula to average out the loadings and apply it to your hospital
[(your CAE-30) + (your partner's CAE-30)] = % average age
Are there any exemptions?
If you were born before 1 July 1934, you are exempt from
You are allowed to drop your hospital cover for a cumulative
period totalling 1094 days (one day less than three years) during
your lifetime without impacting your LHC age loading. This is
called a 'period of absence' and can cover you for periods of
unemployment or gaps between switching health funds.
If you were overseas at the time of your LHC loading deadline,
you have a grace period of 12 months to take out hospital cover
after you return to Australia. (You can return to Australia for
periods of up to 90 days during this time and still be considered
to be overseas).
New migrants to Australia over 31 years of age have 12 months to
apply for hospital cover from the time that Medicare Australia
accepts your application for a Medicare card. After 12 months, new
migrants will incur 2% age loading for every year over the age of
Members of the Australian Defence Force are considered to have
hospital cover during their period with the ADF. If you are
discharged after 1 July following your 31st birthday, you are
considered to be using your period of absence and have 1094 days to
take out hospital cover without incurring the age loading.
Those who hold a Department of Veteran Affairs Gold Card are
considered to have hospital cover and will not incur an age
Lifetime Health Cover Calculator
To check your Lifetime Health Cover age loading, go to the Private Health Insurance
Ombudsman's Lifetime Health Cover calculator
These articles are provided as reference material to allow more informed decision making, but are not intended as being a complete source of information on any topic. All readers should make their own independent analysis on the topic to make sure they have considered the aspects that are important to them.
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