What is Lifetime Health Cover (LHC) loading and do I have to pay it?
Lifetime Health Cover (LHC) loading is an Australian Government initiative designed to take some burden off the public healthcare system, by encouraging people to take out private hospital cover earlier in life.
If you don't take out private hospital cover by July 1, following your 31st birthday an additional cost of 2% (the loading) will be added to your hospital premium for each year you don't sign up. The loading will increase up to a maximum of 70% and will only be removed after 10 years of continuous private hospital cover. This means if you sign up at the age of 40, you'll pay an extra 20% for Hospital cover, compared to someone who joined at age 31.
You can avoid paying the additional LHC by taking out AAMI hospital cover by 1 July following your 31st birthday. As long as you keep your private hospital cover, you can avoid paying the 2% annual loading. The loading only applies to the hospital component of your premiums and does not apply to Extras cover or Ambulance only cover.