Lifetime Health Cover

Lifetime Health Cover was introduced by the Federal Government on 1 July 2000. It affects how much you pay for your private health insurance hospital cover by taking into account your age when you took out private health insurance for the first time.

Please note that Lifetime Health Cover does not apply to overseas visitor covers.

Lifetime Health Cover Terms Explained

Term	Explanation
Certified Age at Entry (or Lifetime Health Cover Age)	Your age on the 1 July before the day on which you take out private hospital cover.
Base rate	The 'base rate' for private hospital cover is the standard premium payable for the cover if no loading applies.
Loading	The 'loading' will be 2% per year, representing the adjustment to the base rate for each year by which the Certified Age at Entry is above 30. For example, if you join at age 40, you will pay an additional 20% on the base rate premium.
Maximum loading	The maximum loading allowed on top of the base rate is 70%. This translates to the maximum loading for an entry age of 65 and above. However, once you have held private health insurance hospital cover for a continuous period of 10 years your loading will be removed.

Lifetime Health Cover Questions and Answers

Who is affected by Lifetime Health Cover?

If you are an Australian citizen eligible for Medicare you will have to pay a Lifetime Health Cover loading on top of your hospital cover premium based on your age on the 1 July prior to taking out private hospital cover for the first time.

If you take out private hospital insurance before you are 31 and maintain your hospital cover without any breaks (or breaks less than 3 years) you won't have to pay the loading on health insurance.

What does Lifetime Health Cover mean?

Lifetime Health Cover recognises the length of time that a person has had private health insurance hospital cover. People who join early in life will pay lower premiums relative to people who join later. For example, someone joining before the age of 30 will pay lower health insurance premiums throughout their years of membership compared with someone who joins for the first time at 50 years of age.

Why did the Government introduce Lifetime Health Cover?

The Lifetime Health Cover scheme was part of the Government's comprehensive strategy to arrest the decline in private health insurance membership and ease the burden on the public health system. The first step was the introduction of the 30% Rebate, which addressed the issue of affordability of private health cover. Lifetime Health Cover was designed to build on the Government Rebate by increasing membership stability among the young and healthy.

What does a person need to do to set base rate premiums under Lifetime Health Cover?

Under Lifetime Health Cover, if a person takes out hospital cover before they turn 31, as long as they maintain their private health insurance hospital cover without any break (or any break less than 3 years) the person will not have a loading applied to their base rate premium.

A person will also not have a loading applied to their base rate premium where they:

Had hospital cover on 1 July 2000 and have maintained it since then;
Were born on or before 1 July 1934;
Turned 31 on or before 1 July 2000 and were overseas on 1 July 2000; or
Are the subject of a determination under Clause 10 of Schedule 2 in the National Health Act 1953 (Cth)

When did Lifetime Health over take effect?

Lifetime Health Cover came into effect on 1 July 2000.

What is the maximum loading someone would ever have to pay?

The Government has capped the Lifetime Health Cover loading at 70%. Once a person has held private health insurance hospital cover for a continuous period of 10 years the loading will be removed.

Will people still be able to vary the level of their private health over under Lifetime Health Cover?

Yes. People are still able to upgrade or downgrade their hospital cover policy under Lifetime Health Cover. The usual waiting periods and applicable pre-existing condition rules will still apply.

However, because Lifetime Health Cover only applies to hospital cover, if you decide to drop your hospital cover and only maintain your extras cover, your Certified Age at Entry may be affected.

Does Lifetime Health Cover affect premiums for extras cover and ambulance cover?

Lifetime Health Cover does not apply to extras cover and ambulance cover. It only applies to hospital cover.

How is the Government Rebate affected by Lifetime Health Cover?

The Rebate applies to the whole premium, including any applicable Lifetime Health Cover loadings on top of the base rate premium.

What happens if someone is unemployed, goes overseas or simply chooses to drop out for a while?

The Government recognises that there are going to be times when people need to drop their hospital cover. For example, if people are travelling overseas for extended periods of time, or in the case of unemployment. To cater for this, people can drop their hospital cover for up to 1,094 days without having to pay an additional Lifetime Health Cover loading when they are ready to take out hospital cover again. Please note that certain days are not counted, such as days spent overseas that are part of a continuous period of being overseas for more than one year.

How does Lifetime Health Cover affect people if they wish to switch between funds?

Under Lifetime Health Cover, people are still able to transfer their private health cover between funds as they always have. All health funds are obliged to recognise the Certified Age at Entry of any new contributor transferring from another fund.

Check out our Lifetime Health Cover calculator to see how you may be impacted

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