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Bigger doesn’t mean better when it comes to Health Funds

big-heath-funds-performance

There are nearly 40 different private health insurance brands in Australia, but most people have only heard of three or four, almost always including Medibank and BUPA. What an incredible insight into the current state of the health insurance market share and which funds dominate the advertising space.

It’s no surprise when you consider that both Medibank and BUPA- Australia’s two largest health funds- each own just under 27% of the market share. Collectively, this puts Medibank and BUPA at having almost 54% of all 11 to 12 million insured Australians. This begs a very important question: who do the other 46% belong to, and how do they compare to the big mogul health funds? Is Medibank and BUPA the top dogs because they are plain and simply the most competitively priced? Or perhaps they have the highest benefits and payouts for health services? In a perfect world, that would make sense… but we certainly don’t live in one.

Let’s take you through a brief overview of the private health insurance industry that the average Australian doesn’t usually get much visibility on. If there are almost 40 private health funds, who are they? Are they reputable and are their members looked after? Is there any risk that a smaller health fund can go under? Finally, how do they perform in comparison to the dominating for-profit health funds? All very good questions that we’d like to help paint a better picture to answer.

If there are almost 40 private health funds, who are they?”

australian health funds
Medibank and BUPA each own almost 27% of the health insurance market.

Some other household health fund names should include NIB, HCF, HBF, AHM, GMHBA and Australian Unity. These funds are our largest health funds after Medibank and BUPA, and together make up the significant portion of the remaining policy-holders in Australia after the big two. They are also all Open health funds, meaning any Aussie resident or citizen can join them. On the other hand, a Restricted health fund means you must meet their eligibility criteria to join, usually related to employment or union membership.

These smaller Restricted or localized health funds are what make-up a majority of the remaining brands we haven’t mentioned, many of which don’t necessarily want a bigger piece of the pie. Being that most of them are operated on a Not-For-Profit basis, aggressive growth and exuberant membership numbers is not necessarily always a good thing. What’s more important is that the ship is steady, the premiums for current members are reasonable, and that the members are looked after for when it matters most. The biggest Not-For-Profit health fund in Australia has well over a million members, and the smallest has below a thousand. Regardless, both health funds are known to be reputable, recognized by most private doctors and hospitals, and to have competitive premiums; bigger doesn’t always mean better.

Many smaller health funds in Australia are also localized, being very dominant in their home city or state. Most people in Newcastle would certainly know about NIB and Phoenix, and GMHBA is a big-name brand around Geelong and greater Victoria. Despite the fact the all three of these funds are available to all Australians in all states, it’s common sense that they have a stronger presence around where they are based.

Finally, many of the lesser known health fund brands are owned and operated, or perhaps underwritten by, a larger insurer. Medibank is behind AHM. NIB is behind APIA and Qantas Assured. GMHBA is behind Frank, Health.com.au, MyOwn and Budget Direct. The list goes on.

So, if there are 40 health funds all with 40 different levels of cover, which one is the best?

Now that we have some greater visibility around other health insurance funds, let’s take a look into how they might perform.

There are many determining factors for what constitutes great value health insurance, but it can summarized down to the cost, what’s included & excluded, what benefit is paid for the service/s and how much the policy increases on April 1st each during the annual Rate Rise. It sounds complicated but in actual fact, all health funds follow a pretty strict system when it comes to how their policies work, which makes it very easy to compare apples with apples to other health funds. It’s services such as ours that help people wanting to review their health cover to get access to many comparative health funds all at once, rather than contacting each health fund one-by-one, a process which would take days.

So, if there are 40 health funds all with 40 different levels of cover, which one is the best? Who is the best health insurance fund? You hear this question a lot in this line of work. The fact of the matter is, it’s the wrong question to ask. No one fund can make any claims of being the best, and you should question anyone who makes any such claims. The health insurance industry is in constant flux, with old policies being canned and new ones being launched year-to-year to keep up with evolving needs and inflation. Compound this truism with the fact that each person has their own individual set of needs that is also always changing, and you can see how silly the aforementioned question really is.

The bottom line is this –

There is no best health insurance fund; great value health insurance is entirely subjective. With each fund having so many varying degrees of inclusions, exclusions, and levels of cover, the only question that should ever be asked is: Which Health Fund is best for me and my current needs? By law, there’s no contracts or exit-fees in health insurance, so you really can compare and switch as often as the wind changes. You also don’t re-serve waiting periods for anything you are already covered for your current fund, so there is often little excuse for remaining on a stagnant or out-of-date policy.

Out of all the hundreds and hundreds of policies available on the market, it is entirely probable that you are not on the best value cover right now, and that’s simple math. We can help you navigate some of the landscape and get you a comparative quote from just a 5 to 10 minute chat on the phone. We don’t have access to all 40+ health funds, but we can get you across up to 20 of them, including many Not-for-Profits.

It certainly doesn’t hurt to look. You’ll generally find that the people who are on the best value health insurance are the ones who review their cover every couple of years and stay up to date with an ever-changing industry.

Fill out the wee form below to have one of our experienced health insurance advisers contact you to help compare your health insurance cover side-by-side. You can also call us directly on 1300 955 691.

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Don’t forget, when you switch health funds you simply do not have to re-serve waiting periods for anything you are already covered for now.