Skip to content   Skip to footer navigation 

“Private health is a rip-off for most young Australians”: CHOICE

Scare campaigns about Lifetime Health Cover loading debunked by data analysis of over 85,000 scenarios.

Consumer advocate CHOICE is advising Australians under 30 to not feel pressured into buying private health insurance they do not need. New data crunched by the advocate also shows industry scare campaigns about turning 30 and Lifetime Health Cover (LHC) are overblown.

"Private health is a rip-off for most young Australians" says Jodi Bird, Health Insurance Expert at CHOICE. "Years of scare campaigns and flashy marketing have had an impact on people's perceptions of health insurance value and the tax implications. For under 30s, this could be up to $1150 a year, wisely spent elsewhere. For over 30s, we've crunched almost 85,000 scenarios and found 99.8% of the time you're better off getting health insurance when you're ready."


Infographic available for embedding here:

Incentives from the government and private health insurance industry are often used to entice young people into health insurance, especially during tax time. CHOICE found these still don't offer good value for money for most young people.

"The Lifetime Health Cover loading is the health insurance marketer's best friend. The message is one of the oldest tricks in the book: you'd better buy now, because it'll be more expensive tomorrow. Our advice is to simply save the cost of the cheapest cover every year until you actually need cover."

Read more on 6 health insurance questions for under 30s answered:

A new CHOICE analysis found that in almost 85,000 different scenarios*, taking out poor value health insurance to avoid the LHC loading will likely leave Australians worse off. In 99.8% of scenarios, the savings in premiums plus the interest earned on it will more than cover the extra cost of the LHC loading.

"Our research shows that in 99.8% of scenarios, you will be financially better off getting insurance when you need it and paying the LHC loading for 10 years than you would if you bought the cheapest insurance you can find from age 31," says Jodi Bird. "In most cases it's even cheaper to pay the Lifetime Health Cover on an expensive Gold policy for 10 years."


Infographic available for embedding here:

The LHC is a government policy that aims to get younger people into health insurance by punishing them for not buying it sooner. It does this by charging an extra 2% for every year that passes after turning 31 where you don't have hospital cover. Loading is only paid for ten years, then premiums drop back to normal.

Read more on CHOICE's research:

For more information, read CHOICE's article on 6 health insurance questions for under 30s answered and Should you buy health insurance before June 30? We'd appreciate a linkback if possible.

Media contact: 0430 172 669,

Editor's notes:

$1150 is the average of Bronze and BronzePlus policies across Australia after deducting the Health insurance rebate of 24.6% - this rebate applies to singles earning up to $90,000 per year.

*CHOICE's model looked at how much would be saved if you put the cost of the cheapest health insurance policy into your savings and then waited anywhere between 1 or 20 years after turning 31 to take up hospital cover, how much you might pay in LHC if you bought the highest cover for ten years, or took out a low-cover Basic policy, or something in between. This excluded birth years pre-1970 because the LHC would have commenced in 2000 with a loading > 2% 

Further advice for young Australians

"Twenty to twenty-nine year olds got $145 back on average from hospital policies in the year to March 2021, compared to $872 for seventy to seventy-nine year olds. The health funds need young people to join to prevent a 'death spiral' but it's not the role of young people to prop up a failing system and increase profits for the big funds. Young people should be asking themselves if health insurance is a necessary expense and most will find that it's not.

"If you do decide you want health insurance, make sure you do the research to find the best policy for your needs and budget. Ask yourself what type of insurance you need. You may need hospital cover or extras, both, or possibly neither. If you decide you need both, you can always get two separate policies from two different insurers if that gets you a better deal."