Lifetime Health Cover (LHC) is a government initiative that encourages you to purchase and maintain private patient hospital cover earlier in life.
If you have not taken out and maintained private patient hospital cover from the year you turn 31 and then you decide to take it out later in life, you will pay a 2% LHC loading on top of your premium for every year you are aged over 30.
For example, if you take out private patient hospital cover when you are 40 years old, you could pay an extra 20% on the cost of this cover per year for 10 years. If you wait until you are 50 years old, you could pay 40% more per year for 10 years.
The maximum LHC loading that can be applied is 70%. Once you have paid LHC loading for 10 years of continuous cover, you will no longer have to pay this loading.
If you cancel your private patient hospital cover after paying for the LHC loading for 10 continuous years, you may become liable to pay the LHC loading again if you take out another private patient hospital cover later.
You don't have to pay the LHC loading if any of the following apply to you:
- you are aged under 31 years old
- you hold an appropriate level of private patient hospital cover before you reach your LHC 'base day' – for many people, LHC base day is 1 July following their 31st birthday, but this can change depending on personal circumstances such as if you are overseas on this day
- you are a new migrant to Australia, and are aged 31 or over, and you had hospital cover within 12 months of being registered for full Medicare benefits
- you were born on or before 1 July 1934.
LHC loadings apply only to private patient hospital cover – they don't apply to general treatment cover (also known as ancillary or extras cover).
The government does not pay the private health insurance rebate on LHC loading component of a policy.
Example: No private health insurance rebate on LHC loading
On 1 July 2022, Rebecca pays a premium of $220 for two months of her private patient hospital cover. Due to Rebecca’s circumstances, her premium includes LHC loading of 10%. The premium eligible for the private health insurance rebate is $200 only, because the LHC loading of $20 does not qualify for this rebate.
Rebecca's income is $59,000 and she is eligible for the 24.608% rebate. She receives a rebate of $49, which is 24.608% of the $200 premium eligible for the rebate. Rebecca does not receive any rebate on the LHC loading of $20.End of example