If you’re nearing 31 years of age, you’re probably wondering how the Lifetime Health Cover (LHC) is going to impact your health plan and out-of-pocket cost. To understand how LHC works with a health insurance plan and how to choose hospital cover from a health insurer, it’s important to understand the basics of the initiative first.
Between navigating a higher premium to reviewing a network of providers and selecting the right cover, it can be overwhelming for any Australian citizen. Luckily, learning the ropes and choosing between health care services isn’t as complicated as it seems.
The Lifetime Health Cover is an initiative that started on the 1st of July, 2000. The concept was to encourage citizens to take out a qualified health plan from an insurance company earlier in life and hold onto that policy for longer. LHC is specifically a hospital cover that will reduce out-of-pocket costs for emergency room medical services. It’s different from a plan from a health insurer or dental plan.
If you purchase an LHC health plan before your “base day” (the 1st of July following your 31st birthday), you’ll avoid a surcharge called LHC loading. This cost leads to a higher monthly premium and its effects stack for each year without a proper health plan. It also affects citizens and migrants differently as the base day has different stipulations depending on the anniversary of Medicare registration through an insurer.
There are also a handful of exclusions for military service members and those past a certain age. On top of this, there are “Days of Absence” which allow certain days without emergency room or hospital cover. These include switching provider networks, taking a new policy with a different health insurance company or network provider, going overseas, and applying for a suspension of membership with your insurer. In these instances, you won’t incur additional loading costs due to a lack of network care. These aren’t common exclusions so you should discuss them with your health care provider.
As a rule of thumb, reductions aren’t frequently granted for this type of medical plan. However, if you’d had LHC loading on your network provider premium and retain your hospital cover for ten continuous years, your loading percentage will drop to zero. This is one of the pros of enrolling early and retaining medical plan coverage. Of course, it’s important to understand that this differs from many health plans in that it’s not for prescription drugs, medicine, a primary care provider copay, or pharmacy services. This is because it’s a different type of insurance plan that provides for specific uses and health care costs.
When you apply for an insurance plan or LHC plan type, you may need to address a discrepancy or two during the process before your medical care coverage begins. Depending on your unique circumstances, you may need to obtain a Clearance Certificate before purchasing insurance products and extra benefits. You may also need a Medicare registration letter if you’re a migrant. You can request this from your local Medicare branch or discuss it with your insurer.
In some cases, you’ll need an International Movement record to confirm your dates of entry and exit from Australia before you’ll be eligible to purchase LHC insurance products. These are rare cases with unique stipulations so read the requirements carefully.
If you’re struggling to find the right health care services for your needs and you are deciding between marketplace plans and health insurers, you can compare health insurance providers with iSelect. Their comparison tool makes it easy to find the right medical plan and LHC option for you.