What is Lifetime Health Cover Loading?

HIF News

HIF Australia

Confused about the Lifetime Health Cover penalties that apply to private hospital insurance?  HIF Executive Manager Anne Humphrey joins the team from Everyday Health TV​ to  explore the impacts of this confusing government legislation.


Tiffany Cherry: Welcome back. Well the Federal Government introduced Lifetime Health Cover loading to encourage Australians to take out private hospital cover at a younger age, but what exactly is it and how does it work? Anne Humphrey an Executive Manager at HIF joins us. Anne, thank you for your time.

Anne Humphrey: Thank you. 

Tiffany Cherry: Can you tell us what Lifetime Health Cover Loading is?

Anne Humphrey: The loading is one of three Federal Government initiatives that is designed to relief the pressure on the public health system. So it is essentially a financial penalty that is applied to those that take out hospital cover at an older age. So the government wants you to take out hospital cover before you’re 31.

Sam Wood: So Anne, I’m just thinking back to when I was in my young twenties and you know, feel like you’re bullet proof and it’s not really a priority to save the government money when you’re more worried about were your next pay check is coming from – how do you convince my younger self of something like that?

Anne Humphrey: Yeah, look it is difficult but did you insure your car?

Sam Wood: Yes, I did – that’s a good point.

Anne Humphrey:  And your health is probably a bit more important than your car and the ability to get into hospital when you need the treatment, the ability to choose your own doctor because you want to make sure you get a good one. 

Sam Wood: Yeah, I know I think that’s a good analogy. I guess being single and you no, not worrying too much about anything other than yourself means you don’t think about it, but no that’s a very very good point. 

Tiffany Cherry: Are you finding that millennia’s who are now in their early thirties – is it harder to convince them to take out Lifetime Health Cover

Anne Humphrey: It depends on their stage of life, I think more and more people are understanding the value of private health insurance and the ability to choose their own doctor and to avoid public hospital waiting lists. 

Casey Beros: So Anne – who has to pay the loading and how is it applied?

Anne Humphrey: It applies to Australians and permanent residents who take out hospital cover for the first time after they turn 31.   

Tiffany Cherry: So if you’re over 31 and you haven’t take it out how much extra are you going to pay?

Anne Humphrey: Look it’s important to note that it only applies to your hospital cover and not your extras cover; so if you’re over 31 you’ll pay an extra 2% on your premium for every year that you’re over 31. 

Sam Wood: So, I’ve just turned 36, so if this is something I’ve just jumped on to now I’d be up for an extra 12% - is that correct?

Anne Humphrey: That’s correct Sam and you’d be paying it for ten years. 

Sam Wood: Right ok, so it’s backdated. 

Anne Humphrey: Oh no, ten years into the future.  

Sam Wood: Ten years into the future? Ok got it. No, that’s good – got it.

Tiffany Cherry: Well, you’re no longer a bachelor Sam, so you’ve got to be thinking of your family moving forward, as you do and as I do. 

Sam Wood: Absolutely, this is something that is definitely more top of mind. 

Tiffany Cherry: So how does it impact families? 

Anne Humphrey:  So if you take out hospital cover as a couple or a family the loading is calculated for the two individuals, then that’s is added together and halved. So essentially you pay the average of that loading. 

Sam Wood: OK

Tiffany Cherry: Anne it can be quite confusing, apart from having these conversations how else can we demystify this and make it easier for people to understand. 

Anne Humphrey: We’ve got great information on our website, so I suggest your viewers visit hif.com.au/lhc

Tiffany Cherry: Thank you so much, we really appreciate your time. 

Anne Humphrey: Thank you


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