Why is my 31st birthday so important?

You, me, the cashier at your local supermarket—we’re all getting older. But if you’re approaching 30, you’re probably starting to hear a lot more about private health insurance.

In the year 2000, while on one of his famed tracksuit walks, Aussie Prime Minister John Howard realised people were only taking out private health insurance when they already had an existing injury. This meant people who'd had insurance for ages were being forced to subsidise new customers who were taking it out later in life. To counteract that, he brought in the Lifetime Health Cover loading Scheme, or LHC for short.

Under the Scheme, it’ll cost you an extra 2% every year you delay taking out private health insurance after the 1st of July following your 31st birthday. So someone who waits to take out cover till 41 will pay 20% more than someone who took it out at 30. If they were to wait until 51, they'd be looking at paying 40% more. (As you can see, it adds up quickly.)

What's more, you get stuck with your loading for a full 10 years. So even if you wait until you're 34 to take out cover, that 6% will follow you around for 10 whole years, regardless of the policy you have or the fund you choose.

There is, as usual, a little bit of fine print. If you take out insurance before 31, you can have what are called absent days, where you won't receive loading. You can be without insurance for a total of 1094 days without incurring any loading.

The government has also put together this brochure, complete with seriously cute stock photos and some decently useful extra information.

There are some other special rules and waivers for the following;

  • Recent immigrants       
  • Australians returning from overseas
  • Norfolk Islanders
  • Former members of the Australian Defence Forces
  • Staff of the Australian Antarctic Division

If needed, our friendly staff can run you through the specifics of these as required.