By Lauren Ferrone
Published: Monday, June 24, 2019
Travelling the world, starting a business, getting married, or maybe even having a child – there are a few milestones people set out to achieve before they hit their 30s. While taking out private hospital cover probably isn’t at the top of your bucket list, it should be. Here’s why.
Take a load off
Feel that? That’s the weight of a load you really don’t want to carry, especially when you’re older.
Lifetime Health Cover (LHC) loading, an initiative created by the federal government, is a loading scheme designed to encourage people to take out hospital cover earlier in life – when they turn 31 to be exact.
To summarise: if you purchase hospital cover earlier in life, and keep it, you will avoid paying the extra LHC loading amount.
A birthday gift you won't forget
Get private hospital cover before you’re:
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To get the full benefits of the initiative, you need to take out hospital insurance with an Australian registered health fund before 1 July on the year of your 31st birthday.
Some special circumstances may apply where you won’t have to pay the loading after 1 July. For instance, if you’re a new migrant or an Australian who has been living overseas.
Under certain conditions, you can also put your hospital cover on hold, such as if you’re travelling or switching from one insurer to another. While you won’t have an active hospital policy during this time, your loading won’t increase.
Happy birthday to me, happy birthday to me
Did we get that annoying tune stuck in your head? You know, the one where you’re forced to wait awkwardly while people sing about you getting older and, in some cases, being a ‘jolly good fellow’?
If you’ve found a speckle of silver sprouting from your head, don’t fret just yet. Even if you’ve missed the cut-off date, there’s still time to get hospital cover and avoid unnecessarily paying more down the track.
Because loading increases with every year, the earlier you sign up the less loading you’ll pay overall.
The loading starts at 2% when you’re 31 years old and doubles every decade until you turn 65. That’s when it reaches the maximum 70% loading.
Once you’ve paid the loading for 10 continuous years, the loading is removed. However, 10 years is a long time – 120 months, 3650 days and 87,600 hours to be exact. That’s why health providers are encouraging people to take out private hospital cover sooner rather than later.
Private hospital cover through the ages
Still with us? Head not spinning from an information overload?
To illustrate how much more you’ll pay than someone who got cover before they were 31, see for yourself:
As you can see, when you’re 40, you’ll pay 20% more than someone who got cover when they were 31, and so on.
Final word
Not yet 31? Forget that snazzy gadget for your birthday. We know what gift we’d prefer.