The Lifetime Health Cover Loading Explained

What is the lifetime health cover loading---

The Lifetime Health Cover Loading Explained

Published: October 24, 2017

The Lifetime Health Cover (LHC) loading is an Australian government initiative, introduced in July 2000, to incentivise people to purchase private hospital cover before the 1st of July following your 31st birthday. This financial loading requires you to pay an additional 2% for each year you are over 30, up to a maximum of 70%.

If you’ve been paying the LHC loading fee for a couple of years, you might be wondering how you can get rid of it. OR maybe you’re considering moving to Australia and wondering how this loading will affect you.

This article aims to provide you with all the information you need concerning LHC loading and how you can avoid it. We’ll also look at LHC loading tips and examples.

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What is Lifetime Health Cover loading?

The Lifetime Health Cover (LHC) loading exist is to ease the financial pressure placed on Australia’s Public Health system (Medicare). Essentially, it is there to encourage you to purchase and maintain your private hospital cover from an early age.

Essentially, if you purchase hospital cover, it does not count if you only take out extras, when you turn 30 you’ll avoid the LHC. If you purchase hospital cover after you’re 31 you’ll have to pay a rate of 2% extra on top of your premium.

The amount you’ll have to pay depends on how old you are. Meaning, the longer you delay the more you’ll have to pay.

However, the good news is your LHC loading can be removed. The bad news is it only gets removed once you’ve been paying for private hospital cover for 10 consecutive years.

How much is the Lifetime Health Cover Loading

How much is the Lifetime Health Cover loading?

The extra fee you’ll have to pay on top of your premium is calculated on the age you were when you purchased private hospital insurance.

For example, let’s assume you are 37 years old, registered for Medicare and want to calculate your LHC before deciding whether it’s worth purchasing health insurance. Using the lifetime health cover loading calculator you’ll pay an estimated extra 12%.

If you wait until you turn 50 you can expect to pay up to 40% LHC loading, that’s about $400 extra a year.

Note: Any travel insurances, overseas student-, visitor- or health-cover that was provided by an international policy is not considered relevant for the purposes of avoiding the loading.

If you were born on or before 1 July 1935, the LHC loading will not apply to you. Also, some veterans and members of the Australian Defence Force are exempt from paying the loading.

To calculate your LHC as a couple or family, you simply need to complete the calculator separately for each individual adult and work out the average.

How can I avoid the LHC loading?

The only way you can avoid LHC loading is to take out hospital cover before the 1st of July in the year you turn 31. Keep paying the instalments and you won’t have to pay the 2% annual loading.

Having private health insurance provides you more control regarding who, when and where you receive medical services and treatment:


You will be able to choose your own doctor, specialist or surgeon.


Avoid waiting months for elective surgery.

Hopsital cover

How can I get rid of my LHC loading?

According to the Private Health Insurance Act of 2007, the only way to get rid of your LHC loading is to continue paying for your hospital insurance for 10 successive years.

However, during these 10 years, you are allowed to “give up” your hospital cover for up to 1094 days. This is known as Days of Absence and mostly apply during:


Permitted breaks: For example, transfers or switching insurers. However, should you exceed the 1094 days by even one day, you will be liable to pay LHC loading when you re-join hospital cover.


Suspension of membership: You could suspend your hospital cover (and LHC loading) for a short time to travel overseas. Suspension terms and conditions vary among health funds, so be sure to check whether you will be allowed to suspend your policy before travelling.


Certain periods overseas (or “international movement”): This only applies when you go overseas for a minimum of one continuous year. Should you return to visit Australia for less than 90 continuous days during this time, you will still be considered as being overseas. However, Days of Absence will start to apply when you overstay these 90 days, with each day then being deducted from your 1094 days.

How long do I have to pay the loading for?

Once your LHC loading has begun, you will have to pay it for the next 10 years. Your loading can only be removed once you have maintained your hospital cover for 10 continuous years.

Is it worth avoiding LHC

Is the Lifetime Health Cover Loading worth avoiding?

Every person’s financial circumstances are different. We can’t tell you whether it is worth avoiding or not but before you make a decision consider your options carefully. Above all else make sure you compare policies so you don’t invest in a poor value health fund just because you want to avoid the loading.

LHC loading vs no loading

Example 1

Johnny turned 31 in July 2001. Because he was single, healthy and worked a desk job, he did not see the need for hospital cover. Instead, he opted to open a savings account and put away small amounts each month for in case of emergencies.

Johnny banked this amount at a high-interest rate and was lucky enough not to have has any serious accidents or illnesses. 15 years later, in 2016, he had over $9000 in his savings account. It turned out that his savings was $2000 more than the 34% LHC loading he would have been paying before he finally decided to buy hospital cover at age 45.

Example 2

Samantha turned 31 in June 2008, but unlike Johnny, she had purchased hospital cover when she was in her 20s because she felt she’d rather “be safe than sorry”. Samantha thus had zero impact from the LHC loading and by 2013 she had already saved $1200 in loading fees.

The LHC loading is determined by the number of years you are over 30, at the time you decide to take out hospital cover. As an extra 2% is added as each year passes, it might make more sense to take out hospital cover early. On the other hand, you might decide you rather want to follow Johnny’s example. The point is, it’s ultimately your decision.

LHC loading explained

I just turned 31 and I don’t have private health insurance

If you have just turned 31 and don’t have hospital cover, then now might be a good time to consider it. You have until 1 July following your 31st birthday. If you haven’t met the deadline, you will have to pay a 2% LHC loading fee.

I was overseas and turned 31 when the LHC was brought in on1 July 2000

If you are a permanent Aussie resident or Australian citizen who was overseas on the 1st of July following your 31st birthday, and if your birthday falls after July 2000, you might not have to pay LHC loading.

All you have to do to be eligible for this exemption is to purchase hospital cover by the first anniversary of the day you return to Australia. If you decide not to do so during this grace period but would prefer to do so later, the loading will be applied and be based on your age at the eventual date of your joining.

I recently migrated to Australia; does the LHC loading apply to me?

Yes, LHC loading does apply to you as a migrant to Australia if you are over 31 years old. The good news is that if you purchase private hospital cover before the first anniversary of your completed Medicare registration, you won’t be liable to pay LHC loading.

All you need to do now is compare various health insurance options that are available; review each one by looking at the benefits, features, exclusions and waiting periods. You can save time and money when you use a comparative insurance service

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If you haven’t turned 31 yet, you might want to consider taking out hospital cover before 30 June of your 31st birthday and avoid the LHC loading. If you are over 31, you might find it is better to take out hospital cover sooner rather than later in order to minimise the annual 2% loading per year you will have to pay.

Start comparing health funds and avoid or reduce your LHC loading. If you have any more LHC loading questions that weren’t answered in this post, please leave a comment below.

Ask an Expert?


  • Leah |

    I’ve had private health cover since I was 18 and now I’m 48.
    I’ve been wondering what the penalties, financially or otherwise would be if I decided to stop my private health insurance?

      Anneke Van Aswegen |

      Hello Leah,

      Before you cancel, you might want to start by asking yourself whether you’ll need private health insurance in future. For example, Medicare does not cover ambulance services, most dental examinations and services, most physiotherapy, glasses and contact lenses or hearing aids.

      If you’re a very healthy individual and feel confident that the public health care system would sufficiently cover you now and in your old age, and you decide to cancel your cover, you’ll likely have no loading to pay because you held complying private hospital cover for the last 10 years or more, so your lifetime health cover loading will be 0%.

      However, if you decide to take up private health insurance again in a few years, you might incur a loading. You can calculate your LHC loading here.

      If you cancel your private hospital cover, you’ll have to pay the Medicare Levy Surcharge which is calculated at a rate of 1% to 1.5% of your income. Please review the 2018/2019 rates here.

      For more on tax and health insurance, please have a read of our health insurance rebate article.

  • Kathleen |

    My current (and previous fund) have been applying a 14% LHC incorrectly. When rolling into these funds, a certificate of coverage was not provided at the time, so therefore the LHC was applied. I have had cover since before 2000 and have been told I now need to provide these certificates to potentially get the LHC refunded.

    My old funds now no longer seem to provide health insurance – SGIO in WA and NRMA and MBF in NSW, so unsure how to obtain this info.
    Only records I have are the notices I received for these years from the health funds stating how many days were covered (all of them) to include in my tax returns. Is this sufficient?

      Anneke Van Aswegen |

      Hi Kathleen. What an interesting question. Because ComparingExpert and consultants are not tax professionals, it’s best to contact your accountant or a tax specialist to assist you in this query. I would love to know their feedback. Best of luck.