Costly July 1 deadline looming for many people
Australians aged 31 have until midnight to take out private health insurance to avoid a government deadline that will become costly over the next few years.
The July 1 Lifetime Health Cover Loading scheme is essentially a penalty which encourages young people to pay for their own cover as soon as possible.
The loading kicks in when Australians turn 31 and adds 2 per cent each year to the eventual premium if they don't have hospital cover.
For someone who has put their insurance off until they are 45, they will be subjected to pay 30 per cent more. On the average singles hospital cover of $1977 per year, that will end up being $593 more each year or a costly $5931 over the course of the 10-year loading period.
More than 380,000 Australians have until midnight tonight to ensure they're not exposed to the loading penalty, with an alarming number unaware the initiative even exists.
A survey from comparison site Finder found more than 61 per cent of Gen Y Australians, about 3.4 million people, don't know what the Lifetime Health Cover Loading is.
"If you're 31 and don't have health insurance today is the day to take out hospital cover if you don't want to end up paying more on your future premiums," the site's insurance specialist Sophie Walsh said.
"While many Aussies are fit and healthy at age 30, the older you get the more likely it is you'll need cover.
"If you don't take it out now you could risk adding as much as 70 per cent to the cost of your policy."
Ms Walsh said it was also important Australians didn't rush out and buy just any cover without comparing the best value as well as establishing which was most suitable.
"There's no point in taking out a Gold policy if you're fit, healthy and don't plan on starting a family anytime soon - don't pay for a level of cover you don't need," she said.
Australians only need to take out a basic cover to avoid being subject to the loading penalty. It doesn't apply to extras.
A bronze hospital policy starts from $100-a-month on average across Australia.
Originally published as Costly July 1 deadline looming