The Short Version
There are over 40 private health fund options in Australia, many of them being not-for-profit, member-owned and established more than 65 years ago.
Medibank and Bupa are for-profit, owned by shareholders and have been around for less than 50 years.
We’ve demonstrated in this article using raw industry data that neither BUPA or Medibank might not be the best health fund for you.
Our helpful health insurance advisers can help you compare some of Australia’s reputable health funds to help you find your new health insurance home. Don’t limit yourself to the “Big Two” just because of their size.
If you’re in the market for health insurance or switching health insurance and you’re asking the question, “Medibank or BUPA?” you might want to read this article about their performance vs other Aussie health funds.
Determining which health insurance provider is better, Medibank or BUPA, largely depends on individual preferences, needs, and circumstances. Medibank and BUPA are the two largest health insurers, each with around 25% of the market share.
However, according to the most recent Commonwealth Ombudsman “State of Health Funds Report”*, neither Medibank nor BUPA finish in the top-performing health funds in terms of key metrics such as:
a) Benefits as a % of Contributions: (How much they give you back vs how much you pay them in premiums)
b) Hospital Related Charges Covered: (How much do they cover of a private hospital visit in total as a percentage)
c) Best Gap Cover in Private Hospital: (How often do their customers incur a sizable doctor’s gap bill)
d) % Extras Benefits paid: (How much do they pay back on Extras claims in general)
* At the time of writing this article. Last update Feb 20, 2024.
Benefits as a percent of Contributions
This critical metric asks how much the fund pays back to members versus how much they charge. It is a great overall indicator of how generous the fund is towards paying members and how much they give back to members.
Neither Medibank nor BUPA are in the top 10 in this measurement.
Medibank is in 15th position, and BUPA is down at 23rd.
Hospital Related Charges Covered in Australia Overall
When one visits private hospital for surgery under a health insurance claim, there is a total bill for all your hospital-related charges. This metric is a ranking of how each fund performs overall in Australia (not State-specific).
Neither Medibank nor BUPA are in the top 10 in this measurement
Medibank is in 23rd position, and BUPA is 19th.
Best Gap Cover in Private Hospital
All surgeries performed in private hospital have an associated MBS Item Number assigned by Medicare with a listed average fee. Your private doctor, however, can charge above this fee as much as they like. The difference between the MBS Fee and your Doctors charged fee is called a “Gap” – which you have to pay out of your own pocket!
“Gap Cover” is when your health fund and Doctor have an agreement to reduce or eliminate this gap fee. If you Doctor participates with your health fund, it can result in lower gap cover expenses for members.
No Gap % – the industry average is 88.8%
Medibank is in 29th Position at 84.6% and BUPA is in 12th at 91.6%.
Known Gap % – the industry average is 97.4%
Medibank is in 29th Position at 96.6% and BUPA is in 9th with 98.3%.
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”
Extras Benefits Paid
For most people, health insurance Extras are the most common and desirable way to get value out of our health insurance. Health management services such as dental, optical, physiotherapy, chiropractic, osteopathy and massage, plus many more.
This measurement tells us how much each Australian health fund pays back on extras claims overall.
The industry average is 52%.
Medibank is in 10th position at 53.4%, BUPA is in 15th position at 50.7%.
Conclusion
Medibank and BUPA may not be your best option to ensure your or your family’s health. There are so many other options that may benefit you in more substantial ways. It’s important not to limit yourself when comparing health insurance in Australia.
Fair Health Care Alliance will help you compare some excellent and reputable health funds from our panel of hand-picked insurers. We can also help you compare against your current policy if you have one.
Our service is fast and completely free, and there are no commitments. Our health insurance advice is honest, transparent and suited to your health needs.
Information is power – get in touch.
