What is LHC loading and why do some people have to pay it?

Published November 2025 | 5 min read
Words by Angela Tufvesson

If you take out hospital cover early enough, you can avoid paying the Lifetime Health Cover (LHC) loading. Find out how it works – and the money you could be saving. 

It might not be a coming-of-age milestone like 18 or 21, but turning 31 is an important year in the world of private health insurance, thanks to a government initiative called Lifetime Health Cover (LHC).

Put simply, if you take out hospital cover earlier in life – and keep it – you’ll avoid paying extra on your premiums. For each year you wait after you turn 31, you’ll need to pay an extra amount called LHC loading.

Discover why LHC loading was introduced, how it works and how to calculate it.

What is LHC loading?

Launched by the Australian Government in 2000, LHC loading aims to encourage people to take out private health insurance earlier in life to ease the pressure on the public health system.

The loading applies only to private hospital cover and is calculated based on the age you first get this cover.

If you take out private hospital cover by 1 July in the year following your 31st birthday, you won’t have to pay any LHC loading on your premiums. But if you haven’t bought and maintained private hospital cover by this deadline and you decide to take it out later in life, you’ll pay an extra 2% on top of your premium for every year you’re aged over 30.

This loading is cumulative, up to a maximum of 70%, and is paid yearly until you’ve had private hospital cover continuously for 10 years, after which the LHC loading is removed.

Who does LHC loading apply to?

LHC loading applies to anyone who delays taking out private hospital cover beyond the LHC age deadline, described above. For new migrants aged 31 and over, the deadline is 12 months from your registration with Medicare. After this, you’ll have to pay a 2% loading for each year you’re aged over 30.

Taking out hospital cover before these deadlines means you won’t be affected by the extra LHC cost.

In certain circumstances, there are some people who won’t be charged the LHC loading, even if they don’t have private hospital cover. These include those:

• aged under 31 years old
• born on, or before, 1 July 1934
• who hold an approved Department of Veterans' Affairs Gold Card.

How is the LHC loading calculated?

To calculate LHC loading, subtract 30 from the age you were when you first took out private hospital cover. Multiply the result by 2% – this is the amount added to your premium. You can also use an LHC loading calculator.

For example, if you take out private hospital cover when you’re 42 years old, you subtract 30 from 42, leaving 12. You then multiply 12 by 2% – giving you the figure of 24%, which is the extra LHC loading you would pay for your private hospital cover every year for 10 years. Using the same method, if you wait until you’re 55 years old to take out private hospital cover, the LHC loading increases to 50% for 10 years.

Here are a few more examples:

Matt, 32
Scenario: Took out private hospital cover before turning 31
Years without hospital cover after 30: 0
Annual loading percentage: 0%
Age after which loading is no longer applied: N/A

Sarah, 40
Scenario: Took out private hospital cover at 35
Years without hospital cover after 30: 5
Annual loading percentage: 10% (2% for each of the 5 years after 30)
Age after which loading is no longer applied: 45

Carol, 65
Scenario: Took out private hospital cover at 44 and has had 10 years of continuous cover
Years without hospital cover after 30: 14
Annual loading percentage: 0%
Age after which loading is no longer applied: Stopped paying loading at age 54

What happens to your LHC loading if you stop and restart hospital cover?

If you’ve taken out private hospital cover before turning 31, you're allowed to go without this cover for up to 1,094 days (roughly three years) over your lifetime without affecting your LHC loading.

These so-called ‘days of absence’ can be used for situations like switching funds or changes in your family’s circumstances. If you use up these days, you will be required to pay an LHC loading once you restart private hospital cover.

If you’re travelling overseas, you can apply to suspend your HCF hospital cover for a short period. If your cover is suspended, it won't affect your LHC loading, as you’re considered to be maintaining your cover.

If you cancel your hospital cover because you’re moving overseas, the days you spend outside of Australia aren't counted towards your days of absence as long as you stay overseas for at least one continuous year.

For people overseas on 1 July following their 31st birthday, the LHC loading won’t apply if you take out hospital cover by the first one-year anniversary of the day you return to Australia.

What happens if you switch health funds?

Your LHC loading is transferred with you when you switch health insurers. It doesn’t reset or increase, as long as you maintain continuous hospital cover during the switch.

How does LHC loading work if you’re on a couples or family policy?

For couples or families, the LHC loading is calculated based on the average loading of the adults included on the policy. For example, if you have a loading of 30% and your partner has no (0%) loading, the loading applied to your policy is 15%.

Here’s another example:

Chris and Lauren, both 41
Scenario: Chris took out private hospital cover at 35, Lauren took it out at 40
Years without hospital cover after 30: 15 (combined)
Annual loading percentage: 15% (the average between them – Chris has 10%, Lauren has 20%)
Age after which loading is no longer applied: After Chris has had cover for 10 continuous years, the loading on their policy would increase to 20% until Lauren has had cover for 10 continuous years

Get an obligation-free health cover check-up

Thinking about switching health funds for your hospital cover? We can help you understand your current cover and how it stacks up against HCF cover – and answer questions about complex incentives including the LHC loading or the Medicare Levy Surcharge. It’s obligation-free and our staff have access to tools and information to assess whether you’re on the right level of hospital or extras cover – saving you time and effort. Call us on 13 13 34 or visit a branch.