The guide · card 4 of 6
Lifetime Health Cover loading: the 2% a year rule
Lifetime Health Cover loading is an extra 2% on your hospital premium for every year you are aged over 30 when you take out hospital cover, if you did not hold it on your base day, up to 70%. It applies to hospital cover only, and it is removed after 10 continuous years.
Your base day
Lifetime Health Cover started on 1 July 2000, to encourage people to take out hospital cover earlier in life and keep it. In most cases your Lifetime Health Cover base day is the later of 1 July 2000 or the 1 July following your 31st birthday. Hold hospital cover with an Australian registered insurer on that day, and keep it, and no loading applies.
Only hospital cover counts. Extras cover, Overseas Visitors Health Cover, Overseas Student Health Cover and insurance from overseas do not count as hospital cover for Lifetime Health Cover.
The calculation
If you do not hold hospital cover on your base day and take it out later, you pay a loading of 2% on top of your hospital premium for every year you are aged over 30, based on your age on the 1 July before you join. The most anyone can pay is 70%.
Loading = 2% × (age on the 1 July before joining − 30)
Ceiling = 70%
Example 1 · one person
- Age on the 1 July before joining
- 38
- Years over 30
- 8
- 2% for each year
- 8 × 2%
- Loading on the hospital premium
- 16%
A made-up person, for illustration. Worked from the official rule.
Example 2 · a couple
- First adult, never held hospital cover, aged 41
- 22%
- Second adult, covered since age 28
- 0%
- Average of the two
- (22 + 0) ÷ 2
- Loading on the couple’s policy
- 11%
The official example on privatehealth.gov.au: on a couple or family policy, the loading is the average of the adults’ loadings.
Example 3 · the ceiling
- Maximum loading
- 70%
- Years over 30 that reach it
- 70 ÷ 2 = 35
- Age on the 1 July before joining
- 65 or older
Arithmetic on the official rule: from 65, the loading stays at 70%.
How the loading ends
The loading is removed once you have held it on your hospital cover for 10 continuous years. It then stays at 0% for as long as you keep hospital cover. If you cancel after it has been removed, a loading may apply again if you take out hospital cover later.
Two more details sit beside it. The government’s private health insurance rebate does not apply to the loading part of a premium, only to the standard part. And the loading applies to hospital cover only; it never applies to extras.
Gaps, travel and suspensions
Once you have held hospital cover on or after your base day, some time without cover does not raise your loading.
- Days of absence
- You can be without hospital cover for a total of 1,094 days (three years less one day) in your lifetime without changing your loading. Use them up, with a gap of 1,095 days or more, and a further 2% applies on rejoining, plus 2% for every further year without cover.
- Suspension
- If your insurer agrees to suspend your cover for a short period, such as an overseas holiday, that time does not count against your days of absence. Insurers’ suspension terms vary.
- Living overseas
- If you cancel hospital cover after your base day to go overseas for at least one continuous year, days spent outside Australia do not count. Return visits of up to 90 consecutive days still count as being overseas.
- Ten-year count
- Permitted breaks can interrupt your 10 continuous years, but the breaks themselves do not count towards the 10.
These periods protect your loading only. A break in cover can mean serving waiting periods again.
People the usual rule treats differently
- New migrants. The base day is the later of the 1 July following your 31st birthday or the first anniversary of your full Medicare registration. Services Australia can issue a Lifetime Health Cover letter confirming your Medicare registration date; anyone over 14 on a card asks for their own.
- Australians overseas on their base day. Citizens and permanent residents who were overseas on the 1 July after their 31st birthday, where that birthday fell after 1 July 2000, avoid the loading by taking out hospital cover by the first anniversary of their return, counting a return as the first stay of 90 days or more.
- Defence and veterans. ADF members on continuous full-time service whose medical services come through the ADF, and holders of a DVA Gold Card, are treated as having hospital cover.
- Older Australians. People born on or before 1 July 1934 are exempt.
Proving your loading when you change insurer
When you move between insurers, or rejoin after a gap, your new insurer may need documents to apply the right loading. A clearance certificate from your previous insurer establishes any earlier loading and the waiting periods you have served; under the Private Health Insurance Act 2007 the previous insurer must provide it within 14 days. An International Movement Record from the Department of Home Affairs confirms dates spent overseas.
The discount that runs the other way
Since 1 April 2019, insurers have been able to offer people aged 18 to 29 a discount of up to 10% on hospital premiums: 2% for each year under 30, to a maximum of 10% for 18 to 25 year olds. It is kept until 41, then reduced by 2% a year until it reaches zero. Insurers choose whether to offer it, and it does not apply to someone covered as a dependant on a family or single parent policy.
Check your own figure
The privatehealth.gov.au site has Lifetime Health Cover calculators. Your insurer applies the loading, and can tell you what is on your premium today.