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All Australians should understand Lifetime Health Cover

14 September 2017 - 2:43pm

The Australian insurance and private health system is a complex beast, and you'd be forgiven for not knowing its ins and outs. However, regardless of where you live, who you are, and what you do, you should understand Lifetime Health Cover and how it could affect you.


Understanding Lifetime Health Cover could mean more money in your pocket. Understanding Lifetime Health Cover could mean more money in your pocket.

What is lifetime cover loading?

Lifetime Health Cover is a government initiative to encourage people to take out private health insurance sooner, and to maintain their cover. It does so by increasing the hospital cover premium you pay by 2 per cent for every year you are aged over 30. 

The first 2 per cent kicks in on the July 1 following your 31st birthday, and is continually added each year for the rest of your life. There are some exemptions, including for:

  • Non residents, new residents or those not eligible for Medicare.
  • Those who had their 31st birthday overseas before returning.
  • Veterans's Affairs Gold Card holders and ex-Australian Defence Force personnel. 

If you're not mentioned above, you should look into your own private health insurance and Lifetime Health Cover. New residents need to take action within 12 months of being eligible for Medicare benefits or they may face an unexpected LHC loading .

Regardless of where you live, who you are, and what you do, you should understand Lifetime Health Cover.

The effects of Lifetime Health Cover loading explained

The increase certainly doesn't sound ideal, but what does it really mean for you in terms of actual monetary cost?

For singles the average hospital cover only premium for a single is between $1,198 and $1,598, depending which state you're in according to Canstar. Most premiums hover around $1,500, so we'll use that figure for the purposes of this example.

From the age of 31, you'll pay at least $30 more for your hospital cover only insurance premiums every year. That increase alone isn't huge, but if you leave it for five years you'll pay an extra $156 per year, or almost $730 extra per year if you don't buy cover until your early 50s. 

Get the cover you need and save money.

Purchase the cover you need earlier to avoid Lifetime Health Cover Loading. 

With the true cost of Lifetime Health Cover explained, you can start to see why it's essential to understand the process. By buying private health insurance before the aforementioned date, you could save yourself hundreds or thousands. You could save even more if something occurs and you end up using your cover to pay for treatment. 

To avoid the burden of LHC loading, get in touch with the team here at HICA. We're experts when it comes to saving you money on your health insurance, and getting you the cover you need without the hassle.