Lifetime Health Cover (LHC)
What is LHC?
Under the Federal Government’s LHC initiative, a loading can be applied to your premium if you take out hospital cover later in life. It’s aimed at encouraging people to take out hospital cover early in life, and maintain it, by allowing them to pay lower premiums throughout their lifetime compared with those who take out hospital cover when they’re older or let it lapse for more than a total period of three years.
When does the loading apply?
If you don’t have hospital cover on 1 July following your 31st birthday, you’ll pay more for your premium once you take out cover because the LHC loading will apply. This means for every year you don’t have hospital cover, you’ll pay a 2% loading on top of a base rate on your premium – or your share of a couple or family premium (up to a maximum loading of 70%). The loading applies only to hospital cover or the hospital component of our packaged covers, not to extras covers.
For example
Bob turns 31 on 1 Dec 2007. If he takes out cover by 1 July 2008, he will pay the base rate premium. If he takes out cover on 2 July 2008, he will pay a 2% loading. If Bob further delays taking out hospital cover, for every subsequent year ending 30 June, he will pay an additional 2% loading.
Are there any exceptions?
Yes. Exceptions apply to:
- Anyone born on or before 1 July 1934.
Special rules apply to:
- Australians returning from overseas
- Norfolk Islanders
- Veterans’ Affairs Gold Cardholders
- Former members of the Australian Defence Force
- Australian Antarctic Division staff
- Refugees and all other categories of migrants to Australia.
If I have a LHC loading will I have it forever?
No, the loading will be removed after you’ve held hospital cover continuously for 10 years.
What if I drop my hospital cover or let it lapse?
If you drop your hospital cover for a total of three years (1,094 permitted days) or more, in most circumstances you’ll have to pay a LHC loading once you take out hospital cover again. If you’re already paying the loading when you drop your cover or let it lapse, it may continue to increase until you take out cover again.
There are some situations when you won’t incur the loading if you drop your cover:
- If you are living overseas for more than one year continuously (this includes visits back home of 90 days or less at a time, during which you are still considered to be living overseas)
- If your health fund has agreed to a period of suspension
- Any further periods that, in combination, amount to 1,094 days or less.
What happens if I change health funds?
If you switch to us from another fund we recommend that you keep your cover with your old fund until the date you transfer to Medibank Private. This way you avoid using up any of the 1,094 permitted days you can be without hospital cover during your lifetime.
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