Everything you need to know about Lifetime Health Cover
What is Lifetime Health Cover?
Lifetime Health Cover (LHC) is a Federal Government initiative which commenced 1 July 2000. It is designed to encourage people to take out and maintain private health insurance earlier in life. Basically, if you don’t have hospital cover by 1 July after your 31st birthday, you’ll pay an extra 2% on the standard contribution rate for every year you don’t hold cover over the age of 31, to a maximum loading of 70%.
Will I ever lose my Lifetime Health Cover loading?
Good news for members with a Lifetime Health Cover (LHC) loading!
LHC is a private health insurance incentive that began on the 1st July 2000. The Private Health Insurance Act 2007 includes a new provision that says that health insurers can stop applying the LHC loading to a member that has held continuous hospital cover for 10 years. The accumulation of 10 years can be interrupted by permitted days without cover (e.g. suspended membership) but this does not count towards the 10 year total. All affected members will receive a letter shortly explaining everything they need to know.
What is changing?
In 2007 the Private Health Insurance Act took effect with a new LHC provision. The new legislation states that if an individual has held hospital cover for 10 continuous years after 1 July 2000, they will no longer have to pay a LHC loading.
Will the LHC loading be taken off automatically?
Yes. If our records indicate that you have held hospital cover with GU Health or another fund 10 continuous years (3,652 days) the LHC loading will automatically be removed at your anniversary date.
Do I have to be a member of the same fund for the LHC loading to be removed?
No. The legislation protects a member's right to change funds without penalty.
The LHC loading will be removed if a person has paid a loading for 10 continuous years, regardless of the type of hospital cover or which fund they may have previously been a member.
What if GU Health does not have the correct LHC details for me?
You will soon receive a letter indicating when your expected LHC removal date will be. If you believe these details are incorrect, we will need you to provide transfer certificates from your previous heath fund(s).
How do I obtain my previous health fund transfer certificates?
Contact your previous health fund(s) and request a copy of your transfer certificate. They are required to issue your certificate within 14 business days.
What if my previous health fund no longer exists?
Review this list to see if your previous health fund has merged with another fund. If they have, contact the new fund to request a copy of your transfer certificate. If your previous health fund is not on the list please contact us on 1800 249 966 to discuss your options.
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 happens if I cancel my private hospital insurance after the loading is removed?
If you cancel your private hospital cover after the loading has been removed, and then re-purchase it at a later date, the LHC provisions will re-apply. Depending on the period of time without hospital cover, you may be subject to the LHC loading at the same or higher rate than would have applied had the loading not been removed.
I suspended my private hospital cover a couple of years ago. Does this still count towards the 10 continuous years?
No. A period of suspension does not count towards the accumulation of the 10 year period. However the suspension period is considered as “permitted days” without hospital cover, and therefore is an allowable break in the continuity of the 10 year period. Note that you have 1094 permitted days in total without hospital cover during your lifetime.
Does my extras cover count towards my 10 years continuous cover for LHC?
No. Extras cover does not qualify as hospital cover and does not count towards your 10 continuous years of membership for LHC loading.
What happens if I have paid my premium in advance and then my LHC loading is removed?
This means premiums paid in advance will be adjusted and we will change your current financial date.
How is my LHC loading affected if I have a family or couple policy?
The loading for a family or couple depends on the age of each adult covered by the policy. The amount is determined by the average of the two adults’ LHC loading. So if two adults decide to purchase a family hospital cover policy and they both need to pay loading, then GU Health will determine the LHC loading by adding the two loadings together and then dividing by 2. For example:
Jill has a LHC loading of 4% and Jack has a LHC loading of 12%. If they choose to purchase a family hospital cover together, the LHC loading would be 8%.
I am a new resident of Australia and migrated after 1 July 2000, will LHC loading apply to me?
If you move to Australia after turning 31 you will not have to pay the loading, providing you take out private hospital cover within 12 months of becoming eligible for full Medicare entitlements.
I have not had hospital cover because I have been travelling overseas in the last 10 years. Does this still count towards the 10 continuous years?
If you are overseas for more than one year (continuously), LHC loading fees are not incurred. Visits back to Australia of less than 90 days are counted as periods ‘overseas’ for LHC purposes.
In order to prove you’re eligible for the lower premium, you may need to supply a Statement of International Movement from the Department of Immigration and Citizenship to verify when you entered and exited the country. For further information, contact us on 1800 249 966