![Australian Private Health Insurance Statistics at a Glance [2025]](https://fairhealthcare.com.au/wp-content/uploads/2024/10/Aaron-Profile-Pic.webp)
The Short Version
- More than half of Australians (54.9%) now have extras cover and just over 45% have hospital cover, with the majority holding a combined policy.
- Medibank and Bupa continue to dominate, holding over 50% of the market share between them.
- Smaller, not-for-profit health funds tend to deliver better value, despite holding less than 1% market share each.
To keep you fully informed about the state of the Australian health insurance sector, let’s dig into some of the most relevant statistics around who’s got cover, which funds have the largest market share, the type of policies people are choosing and much more.
Who has private health insurance in 2025?
Despite the current cost-of-living crisis, private health insurance cover remains relatively stable, thanks in large part to a noticeable increase in policy uptake during and after the COVID-19 pandemic.
According to latest quarterly figures from APRA, 54.9% of Australians now have extras cover, which includes non-hospital services such as dental, optical, physio and chiro. Meanwhile, 45.2% have hospital cover, designed for inpatient services such as surgeries and chronic disease management. The majority of Australians with private health insurance have a combined hospital and extras policy.
Although the proportion of people with hospital cover has declined slightly from pre-2015 levels, uptake has rebounded since 2020 as Australians increasingly want to avoid long public hospital waiting times.
Who’s most likely to have hospital cover by age group?
Data shows that older Australians are more likely to hold hospital insurance. The age group with the highest proportion of members is 75 to 79, which makes sense given their increased need for healthcare later in life. Conversely, young adults aged 25 to 29 are the least likely age group to have hospital cover. There are several reasons why:
- They’re no longer covered under their parents’ family policy.
- They typically earn below the $97,000 Medicare Levy Surcharge threshold.
- They aren’t yet affected by Lifetime Health Cover (LHC) loading, which begins at age 31.
These trends suggest that many younger Australians only begin to think about getting hospital insurance when financial or tax incentives compel them to do so.
Health fund market share in 2025
Private health insurance in Australia continues to be dominated by the same five major players:
- Medibank (including AHM): 27.1%
- Bupa: 24.9%
- HCF: 12.5%
- nib: 9.6%
- HBF: 7.7%
Combined, these big five insurers control over 80% of the market. The problem is that being so heavily concentrated on just a few funds raises competition concerns and can result in higher premiums and limited incentives to improve customer satisfaction or benefits.
Are Australians getting value for money?
According to a recent private health insurance report by the ACCC, “insurers paid 5% more in hospital benefits per policyholder” than the year prior and “the average amount paid out by insurers to policyholders for extras benefits increased by 8.4% per policyholder”.
While this shows that most health funds are paying out more and more benefits every year, for both hospital and extras claims, many Australians are still concerned about the real value of their cover. The ACCC also received nearly 3,500 complaints about private health insurance in 2022-23, which was a huge jump from the year prior, and the first time in several years that the number of complaints increased rather than decreased. According to the report, the main issues of complaint were about:
- Service: Customer service advice, service delays, general service issues, premium payment problems.
- Benefits: General treatment (extras or ancillary benefits), delays in payment, hospital exclusions and restrictions.
- Membership: Cancellation, continuity, clearance certificates.
- Waiting period: Pre-existing conditions, general.
- Incentives: Lifetime Health Cover, rebates.
- Information: Verbal advice, lack of notifications.
What’s the best way to avoid complications and having to make complaints about your health cover?
Make sure you’re on the right policy – with help from experts who know the system inside and out.
Profitability and management costs
In the same reporting period, health insurers collectively reported:
- 110% increase in net profit for the industry.
- Net investment income of $702.4 million.
With premiums rising again this year, it’s understandable that consumers are frustrated about their health insurance costs going up despite the health funds themselves seeing huge profits – especially in a time when cost-of-living pressures are persistent.
Questions remain about how much of these costs are justified when members are still facing gaps in cover and ongoing premium hikes.
Portability
Don’t re-serve waiting periods when you switch to a new health fund or policy
“John was immediately covered for a hip replacement in private hospital because he had already served his waiting periods for joint replacements on his old policy”
Premium increases in 2025
As of 1 April 2025, health insurance premiums have gone up by an industry average of 3.73%. Notably – but perhaps unsurprisingly – Medibank, Bupa, HCF and nib all exceeded the industry average, with nib hitting a 5.79% rise.
Meanwhile, smaller not-for-profit funds like HIF (1.91%) and Phoenix Health Fund (2.43%) delivered below-average increases. If nothing else, this shows a continued trend: that many smaller, member-owned funds are able to deliver better value, especially in terms of benefit-return ratios and smaller premium increases.
The rise of combined policies
Most Australians with private health insurance choose combined policies, which include both hospital and extras cover. Not only is it more convenient for most individuals and families, but it allows them to claim rebates on services that might be essential to them, such as dental, physio and optical.
Combined policyholders could be more likely to stay insured longer and file claims more regularly. However, consumers need to carefully assess whether they are paying for services they actually use. With average combined policies for families now costing anywhere from $6,490 to $8,113 annually, it’s more important than ever to make sure your cover matches your needs.
Are small health funds an underrated option?
Although the vast majority of Australians are with big-name insurers, there are 22 health funds that hold less than 1% market share each, yet they have the potential to deliver superior service, cheaper premiums and higher payouts for benefits. They can even come with perks like gym memberships. Some of these smaller funds include:
- HIF
- Peoplecare
- St.Lukes Health
- Phoenix
- Police Health
- Doctors’ Health Fund
Many of these funds are not-for-profit and community-based, which means surplus funds are reinvested back into member benefits rather than paid out to shareholders.
Conclusion
The latest data paints a clear picture: while private health insurance uptake continues to steadily rise, Australians are becoming more value-conscious and sceptical of the big players.
Choosing a health insurer in 2025 means weighing up price versus cover, as well as big-brand convenience versus potentially more value from smaller funds. There’s no one-size-fits-all answer, but comparing policies with Fair Health Care Alliance can help you make smarter, more cost-effective decisions around your health insurance needs.
FAQ's
54.9% have extras cover and 45.2% have hospital cover in 2024.
Medibank holds 27.1% of the market, followed by Bupa at 24.9%.
Often, yes. Smaller not-for-profit funds tend to have cheaper premiums and better benefit returns.
The industry average is 3.73%, but many larger funds have exceeded this.
Check if your provider participates in your insurer’s gap scheme, and confirm that your hospital is in-network before getting treatment.
