Lifetime health cover loading – a costly error

What happened?

A complainant held private patient hospital cover with a number of different insurers between March 2015 and 2025, when they complained to the Office. They believed there had been no gap in their cover during this 10-year period and expected their lifetime health cover (LHC) loading would be removed in March 2025.

LHC is a loading cost that is applied to your private patient hospital cover, calculated at an additional 2% for every year that you have not continuously maintained private patient hospital cover from the age of 30 (up to a maximum of 70%).

The complainant raised the LHC issue with their insurer earlier this year and was told that their LHC was due to be removed in 2028, not 2025. They were upset by this, particularly as they were paying a 40% LHC, having taken out cover at the age of 50.

The complainant believed one of the previous insurers had provided incorrect information to the other about their LHC. After spending a lot of time trying to remedy the situation, the complainant was frustrated and came to our Office asking for help.

What did we do?

We considered the evidence and discovered that there had been an error in the clearance certificate provided by the complainant’s previous insurer to their current one.

Outcome

A corrected clearance certificate was given to the current insurer who removed the LHC and refunded the complainant for 2 months of LHC they were not liable for. This meant that the individual was not charged the LHC moving forward as their eligibility had been correctly established.