Australia’s top 10 private health insurance providers in 2022
The latest data from the Australian Prudential Regulation Authority (APRA) shows that about 45% of Australians carry private hospital cover, allowing them to potentially avoid long wait times for elective surgeries, while 55% have purchased extras cover, which helps pay for services not covered by Medicare.
Those with private health insurance are also entitled to an “income-tested” rebate from the government that they can access through their insurer in the form of reduced premiums or when they file their tax return as a refundable tax offset. High-income earners, meanwhile, can avoid paying the Medicare Levy Surcharge (MLS), ranging from 1% to 1.5% of their taxable income.
Read more: Private health insurance sector sees profitability improve
How does private health insurance work in Australia?
As the name suggests, private health insurance is designed to pay out for medical expenses that are not covered under the public healthcare system and Medicare. It can also cover the cost of treatment in a private hospital or if one chooses to be treated as a private patient in a public hospital. Policies must be bought from registered health insurers.
Private health coverage comes in two main types:
Hospital cover: This pays out the cost of treatment in a public or private hospital.
Extras cover: Also called general treatment cover, this pays out the costs of medical services that Medicare does not cover.
Ambulance cover, which includes emergency transport and medical care, can also be purchased in most states and territories, except in Queensland and Tasmania as their governments provide automatic coverage for permanent residents.
Read more: Revealed: Private health insurance crucial in accessing preventative healthcare
What are the benefits of taking out private health insurance?
Purchasing private health insurance can yield several benefits, according to the Department of Health. On its website, the health department listed four main advantages of taking out this type of coverage. These are:
1. More health cover and options
Private health insurance lets policyholders access treatment in a private hospital where waiting times for non-urgent procedures are much shorter. They also have the option to be treated by their preferred doctor.
2. Tax incentives
Policyholders can avoid paying the Medicare Levy Surcharge (MLS), a type of levy imposed on Australians who do not have private hospital cover and earn a certain level of income. MLS is designed to encourage people to take up private insurance, with the aim of reducing pressure on the public health system. The table below shows the surcharge levels as of 30 June 2021. These will remain the same until 30 June 2023.
Income level
Singles
≤$90,000
$90,001 to $105,000
$105,001 to $140,000
≥$140,001
Families
≤$180,000
$180,001 to $210,000
$210,001 to $280,000
≥$280,001
Medical Levy Surcharge
All ages
0.0%
1.0%
1.25%
1.5%
Source: PrivateHealth.gov.au
Read more: Private health insurers add benefits to lure young Australians
3. Premium rebates
Most Australians who have purchased private health coverage receive a rebate from the government to help cover the cost of their premiums. This rebate is income tested. The table below details the different rebate amounts as of 1 April 2021. Just like MLS, these will stay the same until 30 June 2023.
Income level
Singles
≤$90,000
$90,001 to $105,000
$105,001 to $140,000
≥$140,001
Families
≤$180,000
$180,001 to $210,000
$210,001 to $280,000
≥$280,001
Rebate
Base Tier
Tier 1
Tier 2
Tier 3
<Age 65
24.608%
16.405%
8.202%
0%
Age 65-69
28.710%
20.507%
12.303%
0%
Age 70+
32.812%
24.608%
16.405%
0%
Source: PrivateHealth.gov.au
Family tiers apply to single parents and couples, including de facto couples, for both MLS and premium rebates, according to the Australian Health Insurance Information (AHII). For families with children, the income thresholds increase by $1,500 for each child after the first.
4. Avoid paying LHC loading
Australians who took out private hospital cover before turning 31 starting on 1 July 2000 or what is also referred to as their “lifetime health cover base day” and have maintained coverage since can avoid paying an extra amount called “lifetime health cover loading.” Those who did not may pay higher premiums for private hospital cover for the next 10 years. The loading amount does not apply to extras cover.
How much does private health insurance cost?
There are several factors that impact the premium prices of a private health insurance policy, including the cover type and tier, how many people a policy covers, and a person’s age, income, and residence.
Hospital cover is available in four different tiers, namely Gold, Silver, Bronze, and Basic, each covering a mandated list of treatments. Because Gold policies cover all 38 types of treatments outlined by the government, they also come with the most expensive premiums. An analysis by comparison website Finder pegged the cost of a gold cover at about $160 a month for a single policy. Monthly premiums for basic, silver, and bronze policies are estimated to be $75, $80, and $115, respectively.
Read more: Australians pay more for less private health insurance cover
The table below details the types of treatments each tier covers.
Clinical category
Basic
Bronze
Silver
Gold
Rehabilitation
ü(R)
ü(R)
ü(R)
ü
Hospital psychiatric services
ü(R)
ü(R)
ü(R)
ü
Palliative care
ü(R)
ü(R)
ü(R)
ü
Brain and nervous system
O(R)
ü
ü
ü
Eye (not cataracts)
O(R)
ü
ü
ü
Ear, nose and throat
O(R)
ü
ü
ü
Tonsils, adenoids and grommets
O(R)
ü
ü
ü
Bone, joint and muscle
O(R)
ü
ü
ü
Joint reconstructions
O(R)
ü
ü
ü
Kidney and bladder
O(R)
ü
ü
ü
Male reproductive system
O(R)
ü
ü
ü
Digestive system
O(R)
ü
ü
ü
Hernia and appendix
O(R)
ü
ü
ü
Gastrointestinal endoscopy
O(R)
ü
ü
ü
Gynaecology
O(R)
ü
ü
ü
Miscarriage and termination of pregnancy
O(R)
ü
ü
ü
Chemotherapy, radiotherapy, and immunotherapy for cancer
O(R)
ü
ü
ü
Pain management
O(R)
ü
ü
ü
Skin
O(R)
ü
ü
ü
Breast surgery (medically necessary)
O(R)
ü
ü
ü
Diabetes management (excluding insulin pumps)
O(R)
ü
ü
ü
Heart and vascular system
O(R)
O
ü
ü
Lung and chest
O(R)
O
ü
ü
Blood
O(R)
O
ü
ü
Back, neck and spine
O(R)
O
ü
ü
Plastic and reconstructive surgery (medically necessary)
O(R)
O
ü
ü
Dental surgery
O(R)
O
ü
ü
Podiatric surgery (provided by a registered podiatric surgeon)
O(R)
O
ü
ü
Implantation of hearing devices
O(R)
O
ü
ü
Cataracts
O(R)
O
ü
ü
Joint replacements
O(R)
O
O
ü
Dialysis for chronic kidney failure
O(R)
O
O
ü
Pregnancy and birth
O(R)
O
O
ü
Assisted reproductive services
O(R)
O
O
ü
Weight loss surgery
O(R)
O
O
ü
Insulin pumps
O(R)
O
O
ü
Pain management with a device
O(R)
O
O
ü
Sleep studies
O(R)
O
O
ü
Minimum requirement of the product tier
(R) Insurers are allowed to offer cover for this clinical category in a restricted basis
O Optional for an insurer to include
Source: Health.gov.au
Which are the top private health insurance providers in Australia?
Every year, the Private Health Insurance Ombudsman (PHIO) releases a State of the Health Funds report to provide both consumers and industry experts with comparative information on the performance and service delivery of all health insurers across the country. Below is a brief description of some of the key indicators PHIO gathers:
Member retention: This measures the percentage of insurer members (hospital memberships only) that have remained with the insurer for at least two years. It is used as an indicator of the comparative effectiveness of health insurers and their level of member satisfaction.
All complaints: This reflects all complaints received by the Ombudsman about the insurer, including those investigated and finalised without the need for investigation.
Complaints investigated: This is a measure of the percentage of complaints that require a higher level of intervention from the Ombudsman, in relation to all complaints investigated.
Benefits as a percentage of contributions: This shows the percentage of total contributions received by the insurer and returned to contributors in benefits.
Management expenses as a percentage of contribution income: This is regarded as a key measure of insurer efficiency. The list below shows management expenses as a proportion of total insurer contributions.
Management expenses per average policy: This is a comparison of the relative amount each insurer spends on administration costs.
According to the report, there were 24 open membership health insurers, or those accessible to all Australians, and 11 restricted membership health insurers, or those that have certain membership criteria, across the country in 2021. The list below ranks the top 10 private health insurers based on the key indicators that PHIO compiled. The companies are arranged according to market share.
1. Medibank
Membership type: Open
Market share: 27.3%
Service performance and finance indicators
Membership retention
86%
Percentage of all complaints
18.5%
Percentage of complaints investigated
19.7%
Benefits as percentage of contribution
83.6%
Management expenses as percentage of contribution income
7.7%
Management expenses per average policy
$271
Source: PHIO, State of the Health Funds Report 2021
Read more: Medibank CFO on APRA’s support to insurers
2. Bupa
Membership type: Open
Market share: 24.8%
Service performance and finance indicators
Membership retention
87%
Percentage of all complaints
23.5%
Percentage of complaints investigated
21.6%
Benefits as percentage of contribution
84%
Management expenses as percentage of contribution income
8.6%
Management expenses per average policy
$335
Source: PHIO, State of the Health Funds Report 2021
Read more: Bupa enters strategic partnership with Cabrini Health
3. HCF
Membership type: Open
Market share: 11.9%
Service performance and finance indicators
Membership retention
88%
Percentage of all complaints
24.5%
Percentage of complaints investigated
17.8%
Benefits as percentage of contribution
89.6%
Management expenses as percentage of contribution income
9.9%
Management expenses per average policy
$387
Source: PHIO, State of the Health Funds Report 2021
Read more: HCF on the value of private health insurers during pandemic
4. nib
Membership type: Open
Market share: 9.3%
Service performance and finance indicators
Membership retention
81%
Percentage of all complaints
9.1%
Percentage of complaints investigated
9.4%
Benefits as percentage of contribution
83.2%
Management expenses as percentage of contribution income
10.3%
Management expenses per average policy
$353
Source: PHIO, State of the Health Funds Report 2021
5. HBF
Membership type: Open
Market share: 7.3%
Service performance and finance indicators
Membership retention
90%
Percentage of all complaints
3.9%
Percentage of complaints investigated
5.6%
Benefits as percentage of contribution
89.7%
Management expenses as percentage of contribution income
15.0%
Management expenses per average policy
$490
Source: PHIO, State of the Health Funds Report 2021
Read more: HBF returns $3 million savings to CUA Health members
6. Australian Unity
Membership type: Open
Market share: 2.5%
Service performance and finance indicators
Membership retention
80%
Percentage of all complaints
4.8%
Percentage of complaints investigated
2.3%
Benefits as percentage of contribution
79.2%
Management expenses as percentage of contribution income
12.3%
Management expenses per average policy
$473
Source: PHIO, State of the Health Funds Report 2021
Read more: Australian Unity’s Healthcare Property Trust announced new projects
7. Teachers Health
Membership type: Restricted
Market share: 2.5%
Service performance and finance indicators
Membership retention
92%
Percentage of all complaints
2.1%
Percentage of complaints investigated
1.9%
Benefits as percentage of contribution
87.8%
Management expenses as percentage of contribution income
7.9%
Management expenses per average policy
$366
Source: PHIO, State of the Health Funds Report 2021
Read more: Teachers Health Group enhances Extras benefits
8. GMHBA
Membership type: Open
Market share: 2.1%
Service performance and finance indicators
Membership retention
78%
Percentage of all complaints
2.0%
Percentage of complaints investigated
0.9%
Benefits as percentage of contribution
86.3%
Management expenses as percentage of contribution income
12.1%
Management expenses per average policy
$452
Source: PHIO, State of the Health Funds Report 2021
9. Defence Health
Membership type: Restricted
Market share: 2.1%
Service performance and finance indicators
Membership retention
89%
Percentage of all complaints
1.8%
Percentage of complaints investigated
3.3%
Benefits as percentage of contribution
90.3%
Management expenses as percentage of contribution income
9.8%
Management expenses per average policy
$420
Source: PHIO, State of the Health Funds Report 2021
10. CBHS
Membership type: Restricted
Market share: 1.5%
Service performance and finance indicators
Membership retention
92%
Percentage of all complaints
1.4%
Percentage of complaints investigated
3.3%
Benefits as percentage of contribution
88.5%
Management expenses as percentage of contribution income
9.0%
Management expenses per average policy
$409
Source: PHIO, State of the Health Funds Report 2021
