What is Lifetime Health Cover (or LHC)?

Almost 31 or older? Avoid paying the Lifetime Health Cover (or LHC) loading.

If you don’t get complying hospital cover before you turn 31, you pay a Lifetime Health Cover loading of 2% on your base hospital cover premium for each year your age exceeds 30 when you do join. This loading is only removed after 10 years of continuous hospital cover.

This means it’s a big advantage to get complying hospital cover before you turn 31. Even if you’ve already turned 31, the sooner you join Westfund Health Insurance, the lower your loading will be.

To see if you will incur an LHC loading use the LHC calculator from privatehealth.gov.au

Who pays LHC?

LHC applies to everyone who takes out hospital cover after July 1 following their 31st birthday (this day is sometimes referred to as your LHC base day).

For example, if you take out hospital cover at age 40 you will pay 20% more (2% for each year over the age of 30 x 10) than someone who first took out the same hospital cover at age 30.

If you are on a couple or family policy, your loading is calculated as an average between the individual loading of the two adults. For example, if one person has 20% loading and the other person has 0% loading, the loading applied to the couples’ policy is 10%.

Example scenario one:

Sally is 37 and has decided to take out a combined private health insurance policy with Westfund. Sally has not previously held private hospital cover. Her base premium is $1000 per annum. Sally must also pay a LHC loading of 14% (2% x 7 years), bringing her total base premium to $1140 per annum.

Example scenario two:

Bruce and Jennifer are 36 and 35 respectively and are taking out a combined family private health insurance policy with Westfund. Neither have previously held private hospital cover. Bruce’s LHC loading is 12% (2% x 6 years) and Jennifer’s is 10% (2% x 5 years) meaning a combined total of 22%. This loading will be halved, bringing their collective LHC loading to 11%. Their base premium is $5000 per annum; with LHC loading applied, the base premium then becomes $5550 per annum.

Costs are for illustrative purposes only and do not reflect the pricing of any specific Westfund Health Insurance product.

NOTE: General treatment (extras) cover, Overseas Visitors Health Cover, Overseas Student Health Cover, and international forms of insurance are not considered to be hospital cover for Lifetime Health Cover purposes.

What is the maximum amount of LHC I could pay?

The maximum LHC loading is 70%.

How long will I need to pay LHC?

Once you have paid an LHC loading on your private hospital insurance for 10 continuous years, the loading is removed.

Your loading will then remain at 0% as long as you retain your hospital cover; or, if you cancel your cover after the loading is removed, as long as you do not exceed your permitted days without hospital cover (see below).

What are permitted days without hospital cover?

If you have taken up hospital cover on or after your Lifetime Health Cover base day, then you can access the following ‘permitted days without hospital cover’ during which you don’t have an active hospital policy, but your loading does not increase. For most people, your base day is the later of 1  July 2000 or the 1 July after your 31st birthday.

  • Gaps in cover – to cover small gaps, such as switching from one fund to another, you are able to be without hospital cover for periods totalling 1094 days (i.e. three years less one day) during your lifetime, without affecting your loading. This is known as ‘Days of Absence’.
    If you use up your Days of Absence – that is, you have a total gap period of 1095 days – you will pay a loading on rejoining private hospital cover. The loading is an additional 2% on top of any previous loading and will increase by 2% for every year after the 1094 days without cover.
  • Suspension of membership – if you apply to your health fund to suspend your hospital cover for a short period (for example, to travel overseas for a holiday), and the fund agrees, this period of suspension isn’t counted towards your 1094 days of absence. Suspension terms and conditions vary from fund to fund, so check with your fund as to whether you can suspend your policy.
  • Going overseas – if you cancel your hospital insurance after your Lifetime Health Cover base day in order to go overseas for at least one continuous year, the days you spend outside of Australia aren’t counted towards the 1094 Days of Absence. You are able to return to Australia for periods of up to 90 consecutive days, per visit, and are still considered to be overseas. Any periods of 90 days or more which you spend in Australia will be deducted from the 1094 Days of Absence.

Who is exempt from LHC?

If you were born on or before 1 July 1934, you are exempt from LHC.

Does my extras cover count towards my ten years continuous cover?

No, LHC relates to private hospital cover only.

Still have an LHC-related question?

Don’t forget, you can call one of our friendly customer service consultants on 1300 937 838 to ask any questions you may have on LHC or private health insurance in general.

Information sourced from: privatehealth.gov.au