Lifetime Health Cover

In July 1999 the government implemented a scheme known as ‘Lifetime Health Cover’ (LHC). As a result of LHC, health funds can now charge different premiums based on the age at which a person first joins a health fund. Anyone joining a health fund before age 30 pays the base rate premium for their health insurance for the rest of their life. Anyone joining after the age of 30 will pay a two per cent loading on top of the base rate premium for every year over age 30.

A 12-month grace period from 1 July 1999 to 30 June 2000 allows people who are not insured to take out hospital cover at the base rate premium. Anyone currently with hospital cover will be treated as if they had joined at age 30.

Special provisions apply to people aged 65 or over on 1 July 1999. They can take out hospital cover at any time and still be credited with the minimum joining age.

Example:

Bill and Bob are both aged 35. Bill has recently taken out private health insurance to beat the end of the 12-month grace period on 30 June 2000. Bill is paying $1000* per annum for private health and extras cover. Bob intends to join, but will get around to it when he has time. If Bob doesn't take out the cover until after 1 July 2000, his yearly premium, for exactly the same cover as Bill has will be $1100 per annum or the base premium of $1000 + 10% surcharge (2% for every year over age 30). Bill will pay this surcharge for the rest of his life.

*This premium is used for example purposes only. To ascertain the correct premium for the cover you want and your circumstances, you should contact a private health insurer.