Lifetime Health Cover loading: base day, the 2% rule and how to remove it
How the LHC loading is calculated, when your base day falls, the 1,094 days of absence, couples' averaging, exemptions and how the loading ends after 10 years.
Lifetime Health Cover (LHC) is a loading added to the hospital part of your private health insurance premium if you did not hold hospital cover by your base day, which for most people is the 1 July after their 31st birthday. The loading is 2% for every year you are over 30 on the 1 July before you take out hospital cover, up to a maximum of 70%. It stays on your premium until you have held hospital cover for 10 continuous years, then it is removed. Extras cover is not affected and does not stop a loading building up.
This guide is part of private health insurance and Medicare explained.
Finding your base day
| Situation | Base day |
|---|---|
| Most Australians | The 1 July after your 31st birthday |
| Born on or before 1 July 1934 | Exempt from LHC |
| New migrant | The later of the 1 July after your 31st birthday and the first anniversary of your full Medicare registration |
| Overseas on your base day | Special rules apply; check privatehealth.gov.au |
| ADF members, DVA Gold Card holders | Special rules apply |
Example. Priya was born on 14 March 1995. She turned 31 on 14 March 2026, so her base day is 1 July 2026. If she takes out hospital cover by that date, she never pays an LHC loading. If she joins on 1 September 2026, she was 31 on the 1 July before joining, so her loading is (31 − 30) × 2% = 2%.
The formula
| Age on the 1 July before joining | Loading |
|---|---|
| 31 | 2% |
| 35 | 10% |
| 40 | 20% |
| 45 | 30% |
| 50 | 40% |
| 55 | 50% |
| 60 | 60% |
| 65 or over | 70% |
The loading applies only to the hospital premium. The private health insurance rebate is calculated on the premium before the loading, so you pay the loading in full.
Days of absence: 1,094 days
You can be without hospital cover for a lifetime total of 1,094 days after your base day without any effect on your loading. Once you use those up, every further year without cover adds another 2%. Short gaps when switching insurers, a few months between jobs, or cancelling for a year all count towards the 1,094 days.
Example (illustrative). Tom took out hospital cover at 29 and holds it continuously. At 36 he cancels to save money and rejoins at 40, about 1,461 days later. He has used his 1,094 days and has 367 days left over, so he gets a loading of 2% for each full year over the allowance: one year, 2%. That loading then lasts until he holds cover for 10 continuous years.
Time spent overseas generally does not count against your days of absence. Visits back to Australia of up to 90 consecutive days still count as time overseas; longer stays use up absence days.
Couples and families
On a couple or family policy, the loading is the average of the two adults' loadings. Children do not have loadings. If one partner has 20% and the other 0%, the policy carries 10%. If the couple later separates, each person's own loading applies to their new policy.
How the loading ends
The loading is removed after you have paid it for 10 continuous years of hospital cover. Breaks within your 1,094 days do not reset the clock, but those days do not count towards the 10 years either. Once removed, it does not come back unless you later drop cover beyond your remaining absence days.
What it costs in dollars
Worked example (illustrative). A Bronze hospital policy costs $1,800 a year before rebate for a single person.
| Joining age (on 1 July before) | Loading | Extra per year | Extra over 10 years |
|---|---|---|---|
| 31 | 2% | $36 | $360 |
| 35 | 10% | $180 | $1,800 |
| 40 | 20% | $360 | $3,600 |
| 50 | 40% | $720 | $7,200 |
These totals assume a flat premium; in practice premiums usually rise each 1 April, so the dollar loading rises with them. The LHC cost by joining age guide compares joining early against paying the surcharge and joining later.
Your LHC statement
Insurers can give you a statement showing your loading, your days of absence used and when your loading will be removed. Keep the transfer certificate when you switch, because it carries your LHC history to the new insurer. If you think your loading is wrong, for example because time overseas was not counted, ask the insurer for its calculation and provide evidence such as passport or travel records. If it is not fixed, the Private Health Insurance Ombudsman can help.
FAQ
Does extras-only cover stop the loading?
No. Only hospital cover counts for Lifetime Health Cover.
Can I avoid the loading by buying the cheapest Basic policy?
Yes. Any registered hospital policy held from your base day avoids the loading, although Basic policies may cover very little. Many people use a Basic or Bronze policy in their early 30s for this reason.
I moved to Australia at 40. Do I pay 20%?
Not straight away. New migrants have until the first anniversary of their full Medicare registration. If you join by then, you pay no loading. See health cover for new migrants and returning Australians.
Does the loading apply to ambulance-only cover?
No. It applies to hospital cover premiums.
Sources
- PrivateHealth.gov.au — Lifetime Health Cover rules, base days and days of absence
- Australian Taxation Office — private health insurance information on your tax return
- Commonwealth Ombudsman — disputes about LHC calculations
