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Reviewed and updated 29 May 2024

About not-for-profit insurers 

A not-for-profit health insurer uses its revenue to:

  • cover operating costs
  • pay benefits to members.

In Australia, not-for-profit health insurers are mutual organisations rather than corporations.

Most not-for-profits claim to be focused on people rather than profits.

All of the restricted insurers are not-for-profit insurers.


How many not-for-profit health insurers are there in Australia? 

In Australia, 25 private health insurers operate on a not-for-profit basis.

InsurerStatus
1.ACARestricted
2.CBHS HealthOpen
3.Defence HealthRestricted
4.Doctors HealthRestricted
5.Hunter Health Insurance (CDH)Open
6.GMHBAOpen
7.HBFOpen
8.HCFOpen
9.HCiOpen
10.Health PartnersOpen
11.HIFOpen
12.Latrobe Health ServicesOpen
13.Mildura Health FundOpen
14.Navy HealthRestricted
15.PeoplecareOpen
16.Phoenix Health FundOpen
17.Police HealthRestricted
18.Queensland Country Health FundOpen
19.Reserve Bank Health Fund (RBHS)Restricted
20.rt healthOpen
21.see-uOpen
22.St.LukesHealthOpen
23.Teachers HealthRestricted
24.TUHRestricted
25.WestfundOpen

Most of these insurers are members of the Members Health Fund Alliance.


Are not-for-profit insurers cheaper than for-profit insurers? 

Not-for-profit insurers are not always cheaper than for-profit insurers even if their focus is on returning insurance premiums to members rather than profits to shareholders.

This is because prices are affected by:

  • the level of cover you choose
  • how well the fund is managed
  • how competitive the insurer’s products are in the market, for example, a large for-profit insurer with many members and a streamlined corporate structure may offer cheaper policies than a not-for-profit insurer.

Most not-for-profit insurers claim to reinvest any profits made into benefits for members, including:

  • giving more back on claims 
  • lower premiums
  • more choice of Extras Cover because you do not have to go to a preferred provider
  • new benefits
  • better service for customers.

What are some of the benefits of joining a not-for-profit insurer? 

Some of the benefits of joining a not-for-profit insurer are:

  • Supporting their practice of returning premiums to members in the form of benefits rather than returning profits to shareholders.
  • They often have a strong community focus. 
  • They often have higher rates of customer satisfaction and retention than for-profit health insurers.

What are some of the problems with not-for-profit health insurers?

Not-for-profit health insurers have a few limitations:

  • They tend to be small and do not control as much of the market as for-profit insurers, which narrows their range of products.
  • They generally have lower revenues and lack access to alternative capital so some risk becoming unsustainable.

Why are there so many not-for-profit insurers in Australia?

The large number of not-for-profit health insurers is closely related to the history of private health insurance in Australia.

In the 19th century, government support for social welfare (including hospital and medical care) was extremely limited.

Private health insurance emerged when not-for-profit ‘self help’ financial organisations, friendly societies and mutuals set up hospital and medical funds. Members, often drawn from a workplace, profession or local community, made small weekly contributions to these funds in exchange for hospital treatment or doctor consultations. If a member needed medical or hospital care, these funds would help cover medical and hospital costs from their pool of funds.

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