Lifetime Health Cover

What is Lifetime Health Cover?

Lifetime Health Cover is a Government initiative that commenced 1 July 2000. It recognises the length of time a person has held hospital cover with a Private Health Insurer in Australia. People who take out hospital cover earlier in life will pay less than those who join later.

To lock in the lowest premiums for life under Lifetime Health Cover, you need to take out hospital cover with a private health insurer before your 31st birthday. If you do not, a loading of 2% for every year you are aged over 30 is applied to your premium. This loading stays in force for 10 (continuous) years.

It is important to note that:

  • Funds set a different premium depending on your age when you join.
  • If you stay in the fund, you pay less than someone who joins later in life.
  • Under the legislation, people who join after age 30 pay 2% more for each year they delay joining.
  • The loading is capped at 70%.

The Federal Government's Lifetime Health Cover initiative aims to encourage more people to join private health insurance at a younger age and maintain their membership over their lifetime.

By encouraging younger, healthier people into private cover as a long-term commitment, this contributes to an overall improvement in the health profile of health insurance members and lessens the cost pressures on private health insurers and premiums.

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Who does it affect?

Lifetime Health Cover affects people over the age of 31 who do not currently hold hospital cover. The legislation only applies to hospital products. If you have ancillary cover and are over 31 years, you need to take out private hospital cover to avoid the age penalty.

Special Provisions

If you fit into any of the following categories there are a number of provisions that could reduce your health insurance premium:

  • Australian Citizens and permanent residents currently living overseas or who have lived overseas at anytime since 2000
  • Recent migrants who have become eligible for Medicare Benefits (including New Zealand Citizens)
  • Refugees
  • Veterans who hold or have held a Gold Card
  • Members of the Australian Defence Force

For more information about these provisions please visit the Lifetime Health Cover section of the Australian Department of Health and Ageing web site.

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Period of Absence

There are some ’permitted days without hospital cover‘ allowed under Lifetime Health Cover. You can drop your membership for brief periods which cumulatively cannot exceed 24 months throughout your lifetime. For every 365 days without cover after that, your loading will increase by 2%. You can also apply to your private health insurer to suspend your cover and at the discretion of your insurer, this period of suspension counts as periods with private health insurance.

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People not affected by Lifetime Health Cover (Exemptions)

  • Those who currently have hospital cover
    Anyone who has had hospital cover prior to, and continuously from, the introduction of Lifetime Health Cover, with a private health insurer is not affected by this legislation.
  • People born before July 1, 1934
    Lifetime Health Cover does not affect anyone born on or before July 1, 1934. If you are already a member of our fund, do not worry. You automatically receive a 'certified age' of 30 years, regardless of your actual age, and you do not pay loading on your premiums.
    Similarly, anyone in this age group who does not have private health insurance has the right to join a private health insurer at any time in the future and not be penalised. This means anyone in this age group pays the same health insurance premiums as a 30-year-old.
  • There are exemption provisions applicable to some migrants, migrants who were citizens of New Zealand, migrants classed as refugees, Australian citizens and permanent Australian residents depending on particular circumstances.

Call ahm on 134 246 for more information regarding exemptions.

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Why take out Hospital Cover?

Private health insurance IS NOT compulsory in Australia for people over 31. It is entirely your choice whether or not to take out private health insurance. However, if you want the best possible health cover at the lowest possible price, with your choice of doctor and no waiting lists, you should act before your 31st birthday to avoid the additional 2% yearly loading on your private health insurance premium.

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