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Lifetime Health Cover (LHC) Loading FAQs
If you have questions around Lifetime Health Cover (LHC) Loading including what it is, how it can affect you and deadlines then you are in the right place! We answer these common questions:
- What is Lifetime Health Cover (LHC) Loading?
- What happens if I put off getting hospital cover?
- What happens if you cancel your hospital cover?
- What if I miss my lifetime health cover deadline?
- How can you avoid the LHC loading?
- Does extras/ancillaries count towards LHC loading?
- Who doesn’t have to pay LHC?
- What is Grace Period / 1094 days of absence?
- What is the 90 day allowance?
What is Lifetime Health Cover (LHC) Loading?
Lifetime Health Cover (LHC Loading) was introduced specifically for people aged over 31 (the deadline being 1st July following your 31st birthday). If you do not have Private Hospital Cover by this point, you will incur a 2% loading every year you don’t have cover. This is added to the cost of your insurance and increases each year until it reaches a maximum of 70%.
NOTE: Your loading does not continue to grow. Once you take out Private Hospital Cover, your loading is then locked in at this percentage and will not continue to grow (as long as you have no further gaps in your cover).
After holding cover for 10 continuous years the loading will automatically be removed from your premium.
What happens if I put off getting hospital cover?
A 2% loading will apply for every year you do not have Private Hospital Cover after the age of 30. The maximum loading is 70% (keep in mind, your loading is locked in and will not continue to rise, as long as you have no further gaps in your cover). LHC loading is added to your premium every year and is continuous for ten years.
For example, if you take up Private Hospital Cover for the first time when you are 50 years old (you will incur a 40% loading). At age 49 the loading would not have changed, and stayed locked at 40%.
After holding cover for 10 continuous years the loading will automatically be removed from your premium.
Try not to put off getting cover, compare and buy health insurance with iSelect today.
What happens if you cancel your hospital cover?
You will incur a LHC loading when re-joining Private Hospital Cover. This loading is additional to any previous loading and will continue to rise by 2% a year to a maximum of 70%. Days of absence will be used in this time. You have 1094 days (three years minus one day) that you can be uncovered without incurring additional loading.
NOTE: Your loading is locked in and will not continue to rise, as long as you have no further gaps in your cover.
What if I miss my lifetime health cover deadline?
The LHC loading deadline day depends on your situation. If the deadline is missed you will incur a 2% loading for every year you haven’t had it from the age of 30. The maximum loading you can incur is 70%.
How can you avoid the LHC loading?
You must take up Private Hospital Cover before your LHC Deadline Day (1st of July following your 31st birthday). Find out more about your LHC Deadline Day here.
If you do not take up Private Hospital Cover before your LHC Deadline Day, you will incur a LHC loading of 2% for every year you are aged over 30, up to a maximum of 70%. This amount is added to your premium every year, for ten years.
NOTE: Your loading does not continue to grow. This is locked in for the time period you have Private Hospital Cover to a maximum of 10 continuous years (as long as you have no further gaps in your cover). You stop paying the loading after you have had Private Hospital cover for 10 continuous years.
Does extras/ancillaries count towards LHC loading?
No. Extras cover or ancillaries are optional and do not count as appropriate cover.
Who doesn’t have to pay LHC?
1. If you are born before 1 July 1934 – you are exempt for LHC. You can join private health cover at any stage and you will pay the same premium as someone who took out cover at the age of 30 or below.
2. If you are a member of the Australian Defence Force (ADA) you are considered to have appropriate level of hospital cover and therefore do not need to take up additional cover.
- If you are discharged before your 31st birthday, normal rules apply.
- After your 31st birthday, you will have 1094 days to join a fund without incurring LHC loading.
- After your 31st birthday, and already had LHC loading prior to joining the ADA, your loading will return to what it was previously.
3. If you were overseas on the 1st of July following your 31st birthday, you have one year (from the anniversary of the day you arrived) before you are required to have Private Hospital Cover.
4. If you are over 31 and overseas on 1 July 2000, you are not subject to loading if you take up Private Hospital Cover when you return to Australia. However after 90 consecutive days at any stage of being back in the country you will start to use your Grace Period (this is called the 90 day allowance). If you exceed your Grace Period of 1094 days you will incur a 2% loading every year after that without cover. Any visits to Australia less than 90 consecutive days do not count against Grace Period (1094 days).
5. Have you moved to Australia? –You must take up Private Hospital Cover before your LHC Deadline Day. Your Deadline Day is from 1st July following your 31st birthday or within 12 months of registering for Medicare, whichever is of the later. If you do not take up Private Hospital Cover before your LHC Deadline Day you will incur a LHC loading of 2% for every year you are aged over 30.
6. If you hold a Department of Veterans’ Affair (DVA) Gold Card you are considered to have appropriate hospital cover and therefore do not need to take up additional cover.
7. If you lived in Norfolk Island before 1 July 2016 you are classified as living overseas. You have until 1 July 2017 to take up Private Hospital Cover without incurring additional LHC loading. After 1 July 2016 Norfolk Island residents were made eligible for Medicare and therefore are subject to normal rules – if are aged over 31, as of 1 July following your 31st birthday you are required to have Private Hospital Cover. Residents of Norfolk Island are subject to pricing and premiums of those in NSW.
What is Grace Period / 1094 days of absence?
Once you’ve taken up private hospital cover and maintained a membership for a minimum of 12 months, you can cancel it for up to 1,094 days (3 years minus 1 day) during your life, without it affecting your loading.
What is the 90 day allowance?
If you cancel your Private Hospital Cover to live overseas, you can return to Australia for up to 90 consecutive days, per visit without using days from your Grace Period (1094 Days of Absence).
What is a LHC Deadline Day?
Your LHC Deadline Day is the exact deadline date in which you should have Private Hospital Cover. For most people (please see exemptions) this is 1st July following your 31st birthday.
Exemptions may include – Recently moved to Australia, returned back to Australia, a member of the Australian Defence Force, Hold a Department of Veterans’ Affair Gold Card, born before 1 July 1934, lived in Norfolk Island.
Adjusting my LHC loading:
What is an International Movement Certificate / Immigration Certificate?
An International Movement Certificate is needed to confirm entry and/or exit from Australia, if you are aged over 31. This requests an International Movement record from the Department of Immigration and Border Protection and allows your insurer to adjust your LHC Loading.
What is a Clearance Certificate?
If you are transferring between funds or re-joining Private Health Insurance, you may need to obtain your Clearance Certificate to confirm previous loading and any wait periods if any, that you have already completed.
What is a Medicare registration date letter?
If you have moved to Australia and are aged over 31, you have one year from the date you registered for Medicare to take up Private Health Cover without being penalised. The Medicare registration letter confirms the date you were first registered so your LHC loading can be adjusted.
NOTE: iSelect can assist you with all the above certificates and in some cases apply for you, to save you the hassle.
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