Turning 30? Time to Get on Track with Lifetime Health Cover Loading!
Your thirties can be an interesting time. Newfound independence, finding your feet in your career … and learning you need to take care of all your own life admin.
Just like paying your rent, your mortgage, or your car payments becomes your sole responsibility … so does your health.
Taking out private hospital cover early in your thirties is something that can help you avoid paying more in the future. That’s because once you’re 31 (or soon after) you’ll need to pay an additional 2% for every year you delay. It’s what’s commonly called the LHC – or the Lifetime Health Cover Loading.
So, what is Lifetime Health Cover loading?
It’s been around since 2000 and was brought in by the Australian government as an incentive to encourage younger people to take out private health cover – and to keep it.
Basically, it means that if you put off getting private hospital cover past 1 July following your 31st birthday, you’ll generally have to pay the Lifetime Health Cover loading of 2% for every year after you turn 30 (and you’ll pay it for 10 years). There are some exceptions, including when you are overseas for up to two years during this period.
If you leave it too long, that can really add up.
If you're already over 31, taking out private hospital cover may help you avoid paying any extra loading as you get older. The longer you wait to take out private hospital cover after turning 31, the higher your LHC loading.
It’s also worth knowing that you don’t receive any government rebate on any LHC portion of your premiums.
There is good news, after a while though.
Your LHC loading can be removed (you’ll pay lower premiums) once you’ve paid it for 10 continuous years. If you keep your hospital cover, you won’t need to pay LHC as you get older.
How can I avoid paying the Lifetime Heath Cover loading (LHC)?
Who wants to pay more? No one!
If you’re turning 31 (or even if you’re older), now’s the perfect time to look at taking out private hospital cover.
Even if you’re past 31, it makes sense to assess how you can avoid paying LHC into the future.
And hanging onto your hospital cover may help keep LHC at bay. Even if you’ve had hospital cover since you’ve turned 31 (but let it lapse) you may need to pay the loading when you look to take up hospital cover again.
What’s the good news?
Even if you can’t swing the financial commitment of taking out hospital cover, it’s worth hanging onto some cover.
LHC loading only applies to hospital cover, so you won’t need to pay it on your Extras or Ambulance cover.
Want to know more about LHC?
Everyone’s needs are different. We’ve got some great resources to help you find out more about the LHC and how it may impact you.
You can read more about the government rebates and incentives that it pays to be aware of when you make out private health cover. We’ve also put together a useful blog to help you navigate the link between private health cover and tax time.
Of course, if you need to know more about how the Lifetime Health Cover loading (LHC) impacts you, there are some great resources on the ATO website or at privatehealth.gov.au
We’re here to help you get the cover that suits you best, but there are some specific rules around LHC and how it applies to you. We’re not tax experts, so you’re best to check the ATO and privatehealth.gov.au resources to get the best advice.
We are, however, experts in private health cover. We’re on hand when you need us to get the cover that suits you best.
How do I get covered?
We know that navigating private health insurance options (including your first hospital policy) and costs can often be stressful. Let us help you.
You can take a look at our range of hospital covers on our website.
And, we’re always here if you need a hand.
You can call our friendly team us on 1300 886 123 (Monday to Friday, 8:30am-5:00pm AEDT/AEST) or reach out via email to help@rthealth.com.au
We’ll be happy to help.
RT Health is a division of The Hospitals Contribution Fund of Australia Limited (ACN 000 026 746). References to RT Health members mean holders of a RT Health branded PHI policy issued by the HCF fund.