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Private Health Insurance for 30 Year Olds

Jonathan April 7th, 2015 0 comments

If you have reached age 30 and you do not already have Hospital cover, now is the time to act. Waiting can mean extra costs that significantly increase your premiums.  The longer you wait, the more you can expect to buy.

Buying Insurance After Age 30 Becomes More Expensive

Buying Hospital cover is very important for all Australians, as well as for certain foreign students and visa-holders. Depending upon your income, hospital cover is required in order to avoid being charged a Medicare Levy Surcharge.

If you wait until age 31 to purchase cover, it becomes more expensive. This is because of Lifetime Health Cover (LHC) loading.  LHC means your cover costs an extra two percent above the standard premiums for each year that you did not have Hospital cover beyond age 30.

You do not want to pay this extra cost for cover. While you may not think you need cover now, most people begin to require significantly more health care as they get older. By the time you need cover, you could be paying far more than you would have if you acted earlier thanks to LHC loading.  Instead of getting yourself trapped in this bad financial situation, take action for your 30th birthday and get covered.

Lifetime Health Cover Loading After Age 31

Lifetime Health Cover loading is a financial penalty that applies if you wait too long to buy hospital cover.  LHC loading cannot be avoided – if you have waited until after your 31st birthday in order to get covered (regardless of whether you buy a singles policy, a family policy, or a couples policy), you will pay LHC loading.

Lifetime Health Cover loading is required in order to try to encourage young people to buy Hospital cover.  Buying Hospital cover by age 30 means you avoid this additional and unnecessary expense.  You will get the peace of mind of knowing you can get care if you get sick, and you will also avoid adding to your future expenses.

Lifetime Health Cover loading can make health insurance significantly more expensive, for example:

  • At age 31, you will pay two percent extra
  • At age 32, you will pay four percent extra
  • At age 33, you will pay six percent extra
  • At age 34, you will pay eight percent extra
  • At age 35, you will pay 10 percent extra
  • Age 36, you will pay 12 percent extra
  • At age 37, you will pay 14 percent extra
  • At age 38, you will pay 16 percent extra
  • At age 39, you will pay 18 percent extra
  • At age 40, you will pay 20 percent extra

The extra cost continues to compound, up to a maximum of 70 percent extra.  This can make health insurance very expensive at the time when you need it most.

Health Insurance Rebate Calculator

Depending on your age, family status, and income level, you may be entitled to a Government Rebate on your private health insurance policy. Use the sliders and dropdown menu below to calculate your rebate.

Please select status

You are entitled to a 1% Government Rebate on Your Private Health Insurance Policy.
Singles
Families
$90,000
$180,000
$90,001-105,000
$180,001-210,000
$105,001-140,000
$210,001-280,000
$140,001
$280,001
Rebate
Base Tier Tier 1 Tier 2 Tier 3
age 65 25.934% 17.289% 8.644% 0%
Age 65-69 30.256% 21.612% 12.966% 0%
Age 70+ 34.579% 25.934% 17.289% 0%

What About New Migrants Who are Over Age 30?

If you move permanently to Australia when you are over the age of 30, you will also be required to purchase Hospital cover in order to avoid Lifetime Health Cover Loading.  You must take out Hospital cover within 12 months of the time when you register for Medicare.

If you wait more than 12 months after coming to Australia, you will have to pay LHC loading of two percent more for each year over age 30.  The older that you are at the time of migrating to Australia, the higher the LHC loading is if you wait longer than 12 months to get covered.

Is LHC Loading for Hospital Cover, Extra Cover, or Both?

LHC loading is only for hospital cover, not for Extras.

Is LHC Loading Ever Removed?

If you have waited until after age 30 to buy Hospital cover, you will need to pay LHC loading for a long period of time when you do buy it. LHC loading is not removed until you have maintained 10 years of continuous Hospital cover.

What If You Had Coverage for a Period of Time Before Age 31?

If you have had Hospital cover prior to turning 30 but have not had it continuously, you may need to pay LHC loading depending upon the amount of time you were without cover. You are allowed to be without cover for a total of 1094 days over the course of your life without triggering LHC loading.

If you apply to your health fund for a brief suspension in coverage and your health fund agrees to this suspension, this period will not count towards your 1094 days and will not impact your LHC loading.

Are There Other Financial Reasons to Buy Insurance at Age 30 (or Earlier)

Avoiding LHC loading is one of the most important reasons to get covered by age 30. However, it is not the only reason. You can also be charged a Medicare Levy Surcharge (MLS) if you are not covered, depending on your income (either your individual income or family income if you are married or in a de facto marriage.)  This calculator helps you to determine how much you would pay.

Medicare Levy Surcharge Calculator

The Medicare Levy surcharge is an additional fee paid on top of the 2% Medicare Levy Surcharge that most Australian taxpayers pay. You can avoid the surcharge if you have Private Health Insurance (Hospital Cover).

The exact surcharge level you'll need to pay depends on your income level and relationship/family status. Use the slider and dropdown menu below to determine what surcharge you're liable for if you don't have private hospital cover.

Please select status

Your Medicare Levy Surcharge is 1% of your income, or $2050
Singles
Families
$90,000
$180,000
$90,001-105,000
$180,001-210,000
$105,001-140,000
$210,001-280,000
$140,001
$280,001
Medicare Levy Surcharge
Standard Tier 1 Tier 2 Tier 3
All ages 0.0% 1.0% 1.25% 1.5%

For many people, age 30 is a time when their career is really beginning to take off. Even if you are not having to pay the MLS, you could be in the future if you don?t have cover. By waiting to buy Hospital insurance, you could end up not only being subject to the MLS but also adding to the cost of premiums as a result of the LHC loading.

While LHC loading and the MLS can both have significant financial consequences, the biggest expenses may be incurred if you end up needing medical care that is not covered. As you get older, you may require more cover. Whether this is obstetrics cover as your family expands or cover for ailments that develop as you age, you do not want to end up paying out of pocket for necessary medical services. Get covered early so you can avoid financial hardship as you get older.

Disclaimer: The above information is correct and current at the time of publication.

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