Lifetime Health Cover Explained - What Australian Expats Need to Know

So, you're an Australian expat or considering becoming one? Whether you're basking under the European sun or navigating the bustling streets of Asia, there's one thing you might not have on your radar yet: Lifetime Health Cover (LHC). But trust us, it's something you'll want to know about, especially if you ever plan on returning to the Land Down Under. Let's dive in.

What is Lifetime Health Cover (LHC)?

You might be wondering, "What exactly is LHC?" Well, it's a government initiative that kicked off on 1 July 2000. Its main goal? To motivate Australians like you to get private health insurance cover. By doing so, the government hopes to lessen the reliance on Australia’s public health system, Medicare.

But here's the catch: If you don't have private patient hospital cover by the time you turn 30, you'll face a 2% insurance premium "loading" for each subsequent year. And no, it doesn't stop there. This loading can go up to a whopping 70%! Imagine paying 70% more than you need to. Not a pleasant thought, right?

The Implications of LHC for Australian Expats

Now, if you're an Australian expat, this becomes even more crucial. Why? Because if you're living overseas for an extended period but have plans to return to Australia someday, you definitely won't want this loading haunting your insurance premiums.

Think about it. While you're overseas, you won't be using your Australian private health insurance. So, it might seem like there's no point in having it. But, the real questions are: What should you do about your cover now? And what about when you return?

Key Features of LHC

Let's break it down. Say you've never had private hospital cover and decide to get it at age 35. You'll be slapped with a 10% loading on your insurance premiums. That's 2% for each of the 5 years you were without cover after turning 30. And you'll be paying this extra amount for the next decade!

But there's a silver lining. The maximum LHC loading is capped at 70%. And if you maintain your hospital cover for 10 continuous years, the loading gets removed. Sounds fair, right?

Special Exemptions and Provisions for Australian Expats

Now, for the good news. There are some exemptions that can save you from the LHC loading:

  • Gaps in Cover and Days of Absence: You're allowed a total of 1094 days (almost three years) without hospital cover in your lifetime without it affecting your LHC loading. This is known as 'Days of Absence'.
  • Suspension of Membership: Planning a short trip overseas? You can suspend your hospital cover for that period, and it won't count towards your 1094 Days of Absence. But remember, terms vary between insurers.
  • Going Overseas: If you cancel your hospital insurance to live overseas for at least a year, the days you're out of Australia won't count towards the 1094 Days of Absence. But, if you visit Australia and stay for more than 90 consecutive days, it will be deducted from the 1094 Days of Absence.

Returning to Australia: Scenarios and Implications

Here's where it gets a tad complex. Depending on when you were overseas, different rules apply:

  • Scenario 1: If you were overseas on the 1 July following your 31st birthday, and you get hospital cover within a year of returning to Australia, you won't face any LHC loading. But delay it, and the loading will be based on your age when you join.
  • Scenario 2: If you were over 31 and overseas on 1 July 2000, you're considered to have had hospital cover on your base day. This means you get the 1094 Days of Absence. While you're overseas, no LHC loading accumulates.

Tips for Australian Expats

A pro tip? Instead of cancelling your health insurance membership, consider suspending it. This way, you retain any waiting periods already served. Plus, you might be able to use the cover on short trips back by paying a month or two's premium.

The key takeaway? Plan ahead. Especially when it comes to returning to Australia. The LHC loading can be a significant financial burden if not managed correctly.

How to Validate or Establish Your LHC Loading

If you're re-joining hospital cover after a break, there are some documents you'll need:

  • Clearance Certificate: This proves any waiting periods you've completed.
  • International Movement Record: This confirms your entry and exit dates from Australia for LHC purposes. You can get this from the Department of Home Affairs.

LHC and the Private Health Insurance Rebate

Did you know the government offers a private health insurance rebate? But, and it's a big but, this rebate doesn't apply to the LHC loading component of a policy. So, if your premium includes an LHC loading, that portion won't qualify for the rebate.


Navigating the world of LHC as an Australian expat can be tricky. But with the right knowledge and planning, you can make informed decisions that could save you thousands in the long run. Remember, it's not just about the here and now. It's about safeguarding your future, especially if that future involves returning to Australia.


To Your Financial Success!

Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to Australian professionals in Singapore. Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd - No: 200305462G | MAS License No: FA100035-3

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General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.

*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.

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