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A Guide to the Lifetime Health Cover Loading

Megan Fraser Updated: 13 May 2021
Types of Health Insurance

A Guide to the Lifetime Health Cover Loading

If you’re heading into your 30s without health insurance, it’s generally a good idea to start thinking about it. Delaying could mean you have to pay Lifetime Health Cover (LHC) loading, designed to encourage young people to sign up for private health insurance. If you’re older and have not signed up for Hospital cover already, the LHC loading will affect you too.

After they turn 31 and maintain their cover, people who have a Hospital plan avoid paying an extra fee called ‘LHC loading’. Failure to do so will incur a surcharge on your health insurance premiums when you do take out Hospital cover. If you’re under 31, request and compare health insurance quotes to find the right Hospital policy for you t avoid the loading.

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Why have private health insurance before you turn 30?

Getting health insurance sooner rather than later will save you money on premiums in the long run. You will avoid paying more for private health insurance in the future if you decide to get a policy early on. Avoid the LHC loading if you get Hospital Cover by 1 July following your 31st birthday.

Additionally, health insurance providers might provide individuals aged 18 to 29 a discount on their private Hospital premiums. You may also be able to take advantage of rebates when tax season rolls around. Typically, you’ll be able to claim up to 33.413% of your private health insurance premiums.

What is the lifetime health cover loading?

The Australian government introduced LHC loading in July 2000 to encourage young people to buy private health insurance before they hit 31 years of age. A loading fee is added to your health insurance premium if you don’t have Hospital cover. LHC loading only applies to Hospital cover. This helps to alleviate the pressure on the Medicare system.

How is the LHC loading calculated?

LHC loading will not apply to you if you buy Hospital cover before your ‘base day’, which typically is 1 July immediately following your 31st birthday.

A 2% fee is added on top of your health insurance premium for each year you don’t have Hospital Cover after 1 July after your 31st birthday. So, should you take out Hospital cover for the first time at 40, for example, you could pay a premium loading of 20% (10 years x 2%). The maximum loading that can be applied is 70% and will only be removed if you hold your health cover for 10 consecutive years.

Should you get private Hospital cover before 1 July following your 31st birthday, you won’t have to pay the penalty. Visit and use their Lifetime Health Cover loading calculator to determine your expected loading percentage.

Who has to pay the LHC loading?

Generally, you’ll need to pay the lifetime health cover loading if you:

How to pay the Lifetime Health Cover loading

Your LHC loading is added to your private health insurance premiums. The loading is added to your premium every year and is continuous for ten years. So, generally, all you’ll need to do is pay your premiums as stated by your insurer using your preferred payment method.

health cover lhc

How long do you have to pay the Lifetime Health Cover loading?

Generally, the loading only applies for ten years. After this period, your premiums should go back to normal. However, this is only if you keep your hospital cover continuously for ten years. For example, if you take hospital cover when you are 40 years old, you could pay an extra 20% on the cost of this cover per year for ten years. The maximum loading that can be applied is 70%. Once you have paid loading for ten years of continuous cover, the loading will be removed.

How does health insurance help you avoid the LHC loading?

The 2% LHC loading fee is only added for each year that you don’t have Hospital cover after 1 July following your 31st birthday. So, taking out a Hospital plan before you reach that mark will mean that you avoid the loading. You may also want to note that standalone Extras cover is not enough to avoid the loading.


Hospital insurance to avoid the private health insurance loading

A Basic Hospital plan is the minimum requirement to avoid the LHC loading. However, it’s best to consider what your specific requirements are when selecting a health insurance policy. Your health, budget, specific needs, policy benefit limits and waiting periods are important factors to consider when making such a decision.

If I temporarily suspend my health cover, will I have to pay the loading?

There are specific circumstances in which temporary suspension of health cover are allowed in relation to the LHC loading. These are referred to as Days of Absence, of which you are allowed 1094. These include travel overseas for a holiday or switching from one insurer to another. During these periods, your hospital policy isn’t active, but your loading won’t increase. Exhausting all your Days of Absence will incur a new LHC loading when you rejoin.

Frequently asked questions and answers

  • Do immigrants to Australia have to pay the LHC loading?

    Yes, if you’ve immigrated to this country, you’ll typically be required to pay LHC loading if you don’t have a qualifying Hospital policy after you’ve turned 31. Immigrants who have bought a private Hospital policy within one year of completing Medicare registration won’t be liable to pay the loading.
  • Is private health insurance worth it to avoid the loading?

    Private health insurance offers benefits for policyholders beyond avoiding the LHC loading. Private health funds offer more choice in healthcare practitioners, scheduling treatment and support for treatments and services not covered by Medicare. Rebates are also common. Typically, rebates are not applied to the LHC part or your private health insurance premium.
  • What if I miss my Lifetime Health Cover loading deadline?

    If you miss your deadline, the 2% loading will be incurred for each year you did not have coverage after turning 30. It’s generally a good idea to try not to put off getting Hospital cover. Fill in the quote form below to compare your options and find the right policy for your requirements.
  • Is anyone exempt from pay the LHC loading?

    An LHC loading exemption applies to Australians born before 1 July 1934 and members of the Australian Defence Force and Department of Veterans’ Affair Gold Card holders. Those who are not in the country on their LHC loading deadline and those who lived in Norfolk Island before 1 July 2016.

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