Health Insurance
Save money with your health insurance
The easiest way to save money is to avoid Lifetime Health Cover loading.
Watch the short video to learn how or discover other ways to save below.
Saving Tip #1:
Avoid Lifetime
Health Cover Loading
What is LHC?
Lifetime Health Cover (LHC) is an Australian Government initiative designed to encourage Australian residents to take out hospital cover earlier in life and to maintain cover.
How does it affect me?
If you don't have hospital cover before 1 July following your 31st birthday, you will pay an additional 2% of hospital cover premium every year you delay – up to a maximum of 70%. This extra cost will remain in place for 10 continuous years.
Lifetime Health Cover loading examples:
31 as at 1 July?
No hospital cover?
If you have a hospital cover that costs $2,000 a year*, the LHC loading each year is 2%.
You will pay $40
extra per year.
That's $400 over 10 years.
35 as at 1 July?
No hospital cover?
If you have a hospital cover that costs $2,000 a year*, the LHC loading each year is 10%.
You will pay $200
extra per year.
That's $2000 over 10 years.
*No rebate applied. LHC is an additional amount that you pay each year that will be applied on top of your premium.
If you're 31 or over,
enter your birthday to see
how much extra LHC loading you could pay if
you don’t have hospital cover on 1 July.
Based on your details, you could pay
an extra 0% per year*.
*Based on hospital cover that costs $2,000 a year.
No rebate applied.
How can I avoid or minimise paying LHC?
You'll need to take out hospital cover by June 30 following your 31st birthday and maintain your cover to avoid the LHC.
After you take out cover, your LHC loading won’t be affected if there are short gaps in your cover – for example, if you switch health insurers. Make sure those gaps don’t add up to more than 1,094 days (3 years less a day) or the loading will apply. These are known as ‘permitted days without hospital cover’.
If you are entitled to a Summary of Cover, you’ll receive one each year along with your tax statement. Your Summary of Cover will show how much loading each person on the membership is paying, and is stored in myBupa for up to 7 years. Be sure to check whether your LHC is correct.
Login myBupaGot questions?
Saving tip #2:
Avoid the Medicare
Levy Surcharge
What is MLS?
To have access to healthcare (Medicare), most Australian residents pay a Medicare Levy of 2% of their taxable income. For tax purposes, people who are not Australian residents generally do not pay the Medicare Levy as they are not entitled to Medicare benefits. In addition, if you are single and earn over $90,000 per annum, or a couple/family and earn over $180,000 per annum and do not have the appropriate hospital cover, you may be charged the additional Medicare Levy Surcharge.
Saving tip #3:
Get the Australian Government Rebate
on private health insurance (the "Rebate")
What is the Rebate?
Depending on your age and income, the Government contributes an amount (known as a ‘rebate’) towards the cost of your private health insurance premium.
Download the Government rebate application form Nominate your rebate tierFAQs
Get all the facts on the LHC.
If you have a loading, you’ll pay this on top of the 'base rate' premium or standard premium payable for your hospital cover. The Lifetime Health Cover loading does not apply to extras cover premiums.
Any loading you pay due to Lifetime Health Cover will be removed from your premium after 10 years of maintaining continuous hospital cover.
If you are under 31, take out hospital cover before 1 July following your 31st birthday and maintain your cover from that point onward. After you take out cover, your LHC loading won’t be affected if there are short gaps in your cover – for example, if you switch health insurers – but make sure those gaps don’t add up to more than 1,094 days (3 years less a day) or the loading will apply. These are known as ‘permitted days without hospital cover’.
If you are over 31, you can take out hospital cover as soon as possible to minimise the loading. Each year you delay, your loading will increase by 2%, up to a maximum of 70%.
Lifetime Health Cover (LHC) loading is only applicable to Australian citizens and residents with hospital cover.
In addition, there are situations where you won't have to pay the loading. These include if you:
- had hospital cover on 1 July 2000 and have maintained it since then; or
- were born on or before 1 July 1934.
- Special rules also apply to certain categories, including:
- new migrants to Australia;
- people who were overseas on the 1 July following their 31st birthday;
- people who were over 31 and overseas on 1 July 2000;
- members of the Australian Defence Forces or those who hold a Department of Veterans' Affairs (DVA) Gold Card; and
- Residents of Norfolk Island have been granted an exemption from the loading if they purchase a domestic private hospital product prior to 1 July 2017.
For more information, visit the Department of Health and Ageing website.
Yes. You can still upgrade or downgrade your hospital and extras covers under Lifetime Health Cover (LHC). The usual waiting periods and applicable pre-existing condition rules will still apply where cover is upgraded.
However, because LHC only applies to hospital cover, if you decide to drop your hospital cover and only maintain your extras cover, your Lifetime Health Cover Age may be affected in the future.
For couples, de facto couples, or families, the total loading on their health cover policy is an average of the loading for each adult. Here are some examples of how this works:
Example 1
Lisa and Brian took out a hospital cover of a base rate of $2,000 per year*, by 30 June.
Lisa has an LHC age of 30 and Brian has an LHC age of 32.
Lisa attracts a 0% loading while Brian draws a 4% loading, meaning the total average loading on the policy is 2% (0% + 4% = 4. 4 divided by 2 = 2%).
The LHC on Lisa and Brian’s health cover policy is an additional $40 per year. That’s $400 extra over 10 years based on the current premium.
Example 2
Amy and Steve took out a hospital cover of a base rate of $2,000 per year*, by 30 June.
Amy has an LHC age of 35 and Steve has an LHC age of 37.
Amy attracts a 10% loading whilst Steve draws a 14% loading, meaning the total average loading on the policy is 12% (10% + 14% = 24%. 24% divided by 2 = 12%).
The LHC on Amy and Steve’s health cover policy is an additional $240 per year. That’s $2400 extra over 10 years based on the current premium.
*No rebate applied. LHC is an additional amount that you pay each year that will be applied on top of your premium.
If you are eligible for the Australian Government Rebate on private health insurance, this will apply to your base hospital premium only and will not apply to the portion of your hospital premium that relates to the Lifetime Health Cover loading.
Lifetime Health Cover does not apply to extras cover, Emergency Only Ambulance Cover and Premium Ambulance Cover. It only applies to hospital cover.
The Australian Government recognises that there are going to be times when people need to drop their hospital cover. For example, if you are travelling overseas for extended periods of time or are unemployed. To cater for this, people can drop their hospital cover for up to 1,094 days in total throughout their lifetime without having to pay an additional Lifetime Health Cover loading when they are ready to take out hospital cover again. These are known as ‘permitted days without hospital cover’.
Permitted days without hospital cover are only available to those who have held hospital cover on or after their LHC base day and have been assigned a Lifetime Health Cover Age. Permitted days without hospital cover do not count towards your days with continuous cover.
There are certain days that we won’t count towards your 1,094 days, including when you:
- validly suspended your membership in accordance with fund rules, or
- are overseas (including Norfolk Island until 1 July 2016) for a continuous period of more than one year and have not returned to Australia for a period of more than 90 days.
Under Lifetime Health Cover (LHC), people are still able to transfer their private health insurance cover between health insurers. All health insurers are obliged to recognise the Lifetime Health Cover Age of a new member transferring from another insurer. Any days that have been accumulated as permitted days without hospital cover will also transfer across to your new insurer. Remember if you have a break between switching from your old insurer to your new insurer, these may be permitted days without hospital cover and will be included in your total of 1,094 days allowed before an additional loading is added to your cover.
All Bupa hospital cover options, except any overseas visitor cover, will enable you to lock in your Lifetime Health Cover Age.
No. To lock in your Lifetime Health Cover Age you need to hold hospital cover.
Under certain circumstances you can suspend your Bupa membership (such as when travelling overseas) without affecting your LHC loading. Call us on 134 135 to see if you are eligible for this type of suspension. If you do suspend your cover, it’s important to remember that this won’t exempt you from paying the Medicare Levy Surcharge* if it applies to you
*The Medicare Levy Surcharge is an additional tax on top of the Medicare Levy for Australian taxpayers who do not have an appropriate level of private patient hospital cover and earn above an income threshold.
Each year, Bupa will send out your tax statement by no later than 15 July, at the same time we’ll issue your Summary of Cover if you are paying the Lifetime Health Cover loading. A copy of your Summary of Cover will be stored in myBupa, along with any other tax statements for up to 7 years. Login to myBupa.
| Term/Definition |
|---|
| Lifetime Health Cover loading Lifetime Health Cover loading is paid if you haven’t taken out hospital cover before 1 July following your 31st birthday – the loading increases by 2% each year, to a maximum of 70%. Any loading that applies will be removed after you’ve held hospital cover continuously for 10 years. |
| Maximum loading The maximum loading allowed on top of the base rate is 70%. This translates to the maximum loading for a Lifetime Health Cover Age of 65 and above. However, once you have held private hospital cover for a continuous period of 10 years your loading will be removed. |
| Lifetime Health Cover Age Your age on the 1 July before the day on which you take out private hospital cover. |
| Base rate The 'base rate' for private hospital cover is the standard premium payable for the cover if no loading applies. |
| Lifetime Health Cover base day Your LHC base day is the deadline by which you must have taken out private hospital insurance to avoid incurring a LHC loading. For most people this will be 1 July following their 31st birthday, although there are exceptions to this. If you are a new migrant to Australia, your LHC base day is the later of 1 July following your 31st birthday and the anniversary of when you register for full Medicare benefits. |
| Term | Definition |
|---|---|
| Lifetime Health Cover loading | Lifetime Health Cover loading is paid if you haven’t taken out hospital cover before 1 July following your 31st birthday – the loading increases by 2% each year, to a maximum of 70%. Any loading that applies will be removed after you’ve held hospital cover continuously for 10 years. |
| Maximum loading | The maximum loading allowed on top of the base rate is 70%. This translates to the maximum loading for a Lifetime Health Cover Age of 65 and above. However, once you have held private hospital cover for a continuous period of 10 years your loading will be removed. |
| Lifetime Health Cover Age | Your age on the 1 July before the day on which you take out private hospital cover. |
| Base rate | The 'base rate' for private hospital cover is the standard premium payable for the cover if no loading applies. |
| Lifetime Health Cover base day | Your LHC base day is the deadline by which you must have taken out private hospital insurance to avoid incurring a LHC loading. For most people this will be 1 July following their 31st birthday, although there are exceptions to this. If you are a new migrant to Australia, your LHC base day is the later of 1 July following your 31st birthday and the anniversary of when you register for full Medicare benefits. |
Get all the facts on the MLS and PHI Rebate.
The Medicare Levy Surcharge (MLS) is an additional levy on top of the Medicare Levy that is payable by Australian taxpayers who do not have an appropriate level of private patient hospital cover and earn above an income threshold. The MLS ranges from 1.0% to 1.5%, depending on a person’s income.
For the 2015/2016 financial year income thresholds start at $90,000 for singles and $180,000 for couples and families. Single parents and de facto couples are subject to family income thresholds. For families with children, the thresholds increase by $1,500 for each child after the first. The thresholds are effective 1 July each year and are indexed annually.
For more information on how MLS works and how it may impact you, visit ato.gov.au or speak to your tax adviser.
The Australian Government Rebate on private health insurance (the ‘rebate’) is an initiative whereby the Government may contribute to a percentage of the cost of a member’s private health insurance. If you’re an Australian permanent resident who qualifies for Medicare and holds private health insurance, you may be entitled to receive the rebate depending on your age and income. The rebate is indexed annually from 1 April each year.
We have a number of ways you can select or change the rebate tier that applies to your policy.
You can do this:
- online by logging into myBupa
- by calling us on 134 135 or
- by dropping by your local Bupa centre.
If your income or circumstances change throughout the financial year, we recommend you consider changing your tier to minimise your tax liability.
If you currently receive the rebate as a reduced premium and you don't nominate a rebate tier, you will continue to receive your current rebate. The ATO will recover any amount you have received that is above your entitlement through your tax return or if you receive less rebate than you’re entitled to the ATO will refund the difference owed to you in your tax return.
Yes. If you’re unsure of your income range or if you’d prefer to claim the rebate as a lump sum, you can choose to pay the full premium and claim your rebate entitlement through your tax return. If you have claimed too much rebate, this will become a tax liability that you’ll be required to repay to the ATO. If you’d prefer not to incur this liability, you may nominate a lower rebate tier with us by doing so through myBupa.
There are no penalties for nominating an incorrect rebate tier. However, when you claim the rebate as a premium reduction, you should consider nominating a tier based on your estimated income. If you nominate a tier that results in a lower rebate than your income entitles you to, you may receive a rebate 'refund' through your tax return for that year. If you nominate a tier that results in a higher rebate than your income entitles you to, you will incur a tax liability when you lodge your tax return and will be required to repay this to the ATO.
For advice specific to your circumstances, you should speak with your tax adviser.
We will confirm your payment for you, either:
- in writing once your rebate tier nomination has been processed through myBupa;
- in person when you visit a Bupa centre; or
- over the phone when you call us.
If you’re an overseas visitor, find out how you’re affected by the rebate and MLS.
If your company currently subsidises your private health insurance premiums and you’d like more information about the rebate, please contact your HR manager.
No. If you wish to nominate a rebate tier you simply need to estimate your income within the appropriate tier. Nomination of a rebate tier will not be taken by Bupa as an indication of your income. You can choose any tier you wish.
If you’re a Bupa member and you can’t find the information you need online, call us on 134 135 or email us via myBupa.
The ATO and the Department of Health and Aging have comprehensive information about the rebate and the Medicare Levy Surcharge on their websites.