23. 12. 2010

Lifetime Health Cover. What it is and why you pay it..

You’re 35 years old, about to start a family, and you decide to take out Hospital cover
Hospital cover is a type of health insurance which covers a member for the cost of treatment in hospital, should they require it.The price of hospital
more...
 in case of the unexpected. You check out a few health funds, find the cover you want at the price you want and hit the "Apply" button.

It’s at this point that you’ll be greeted with a message that loosely translates as "to you sir / madam that’ll be 10% extra".

If something similar has happened to you, you’re not unique. The reason for this is a government penalty known as Lifetime Health Cover
If you are aged over 30 and you are taking out private hospital cover for the first time, you may have to pay an additional loading on top of your pre
more...
, which applies to all hospital insurance policies.


What is Lifetime Health Cover
If you are aged over 30 and you are taking out private hospital cover for the first time, you may have to pay an additional loading on top of your pre
more...
?
Lifetime Health Cover
If you are aged over 30 and you are taking out private hospital cover for the first time, you may have to pay an additional loading on top of your pre
more...
 is a penalty applied to hospital insurance policies taken out by those over the age of 30 who have not previously been insured. Under the scheme, a 31 year old who has never been insured pays 2% extra, a 32 year old 4% extra and so on, to a maximum penalty of 70% for those over 65.

It’s applied by the government to the premiums of all Hospital cover
Hospital cover is a type of health insurance which covers a member for the cost of treatment in hospital, should they require it.The price of hospital
more...
 policies of all health funds. The funds themselves have no control over it, nor can they allow you to waive it or pay it on your behalf.

Extras policies are not subject to Lifetime Health Cover
If you are aged over 30 and you are taking out private hospital cover for the first time, you may have to pay an additional loading on top of your pre
more...
 loading. If you’re on a combined plan, it’s only paid on the hospital portion of the premium.

Lifetime Health Cover
If you are aged over 30 and you are taking out private hospital cover for the first time, you may have to pay an additional loading on top of your pre
more...
 was introduced in 2000 in order to encourage people to take out private Hospital cover
Hospital cover is a type of health insurance which covers a member for the cost of treatment in hospital, should they require it.The price of hospital
more...
 earlier, and was quite successful in doing that. A 2003 study showed that the average age of people covered by hospital policies fell from 39.7 years to 37.7 years in the first six months after the penalty was introduced.


How do I avoid paying Lifetime Health Cover
If you are aged over 30 and you are taking out private hospital cover for the first time, you may have to pay an additional loading on top of your pre
more...
?

Take out Hospital cover
Hospital cover is a type of health insurance which covers a member for the cost of treatment in hospital, should they require it.The price of hospital
more...
 as soon as possible.
Put simply, Lifetime Health Cover
If you are aged over 30 and you are taking out private hospital cover for the first time, you may have to pay an additional loading on top of your pre
more...
 is not going away, and there’s no way around it. The longer you wait the more it will cost you when you finally take out Hospital cover
Hospital cover is a type of health insurance which covers a member for the cost of treatment in hospital, should they require it.The price of hospital
more...
. Eventually, the extra penalty may outweigh any savings you make, for example in income tax.
Stay covered
Many people don’t know that after ten continuous years on a hospital insurance policy, your Lifetime Health Cover
If you are aged over 30 and you are taking out private hospital cover for the first time, you may have to pay an additional loading on top of your pre
more...
 loading will be removed. However, if you dropped your hospital policy, it would be re-applied should you ever go back.
Go overseas
You’re allowed to be overseas for a period of 1094 days (roughly three years) without it affecting your Lifetime Health Cover
If you are aged over 30 and you are taking out private hospital cover for the first time, you may have to pay an additional loading on top of your pre
more...
 loading. So if you get offered your dream job in Hong Kong, or you want to spend a year backpacking through South America, you won’t be stung on your return.
Be from overseas
Lifetime Health Cover
If you are aged over 30 and you are taking out private hospital cover for the first time, you may have to pay an additional loading on top of your pre
more...
 is only applied once you are 30 AND you are eligible for Medicare
Medicare is the Australian Government's universal health insurance scheme, which covers all eligible citizens and residents for hospital treatment in
more...
. (You can’t take out private health insurance unless you have Medicare
Medicare is the Australian Government's universal health insurance scheme, which covers all eligible citizens and residents for hospital treatment in
more...
 number.) However, from the day you become eligible for Medicare
Medicare is the Australian Government's universal health insurance scheme, which covers all eligible citizens and residents for hospital treatment in
more...
 (usually the day you’re granted residence) you have 365 days to take out complying insurance or, if you’re 30 or over, Lifetime Health Cover
If you are aged over 30 and you are taking out private hospital cover for the first time, you may have to pay an additional loading on top of your pre
more...
 will apply to you too.
Join the Defence Forces
That’s a joke, but it does have a basis in fact. Periods spent under the cover of the Australian Defence Forces, Australian Antarctic Expedition or the Department of Veterans Affairs do not count towards Lifetime Health Cover
If you are aged over 30 and you are taking out private hospital cover for the first time, you may have to pay an additional loading on top of your pre
more...
. On leaving the forces, if you are over 30 you have 1094 days to take out complying health insurance.

How do I find out my Lifetime Health Cover
If you are aged over 30 and you are taking out private hospital cover for the first time, you may have to pay an additional loading on top of your pre
more...
 loading?
The Department of Health has a calculator that can tell you the exact premium you’ll pay, but the basic loadings are listed below.

 

Your age Loading
Your age
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Your age
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Your age
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300%3918%48
36%57
54%
31
2%
40
20%
49
38%
58
56%
324%
41
22%
50
40%
59
58%
336%
42
24%
51
42%
60
60%
348%
43
26%
52
44%
61
62%
3510%
44
28%
53
46%
62
64%
3612%
45
30%
54
48%
63
66%
3714%
46
32%
55
50%
64
68%
3816%
47
34%
56
52%
65+
70%
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