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The good and the bad of Medibank, Bupa, HBF, HCF and NIB 

The five big health funds compared on complaints, discounts and cost.  

big five health insurers logos bupa medibank hbf hcf nib
Last updated: 26 October 2021
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Checked for accuracy by our qualified fact-checkers and verifiers. Find out more about fact-checking at CHOICE.

The Australian health insurance marketplace is highly concentrated, and many people are only familiar with the names of a few of the 36 health funds.

And it's no wonder – about eight in ten health insurance policies belong to the five biggest health funds. Medibank and Bupa dominate with more than half of the health insurance market share between them:

  • Medibank (including AHM) – 27%
  • Bupa – 25% 
  • HCF – 12%
  • NIB – 9%
  • HBF – 7% (the large majority of HBF members are based in WA).

Are big health funds better than small funds? It depends. The biggest health funds have some bad value policies, but we recommend some of their other policies.

On the other hand, some small funds have a market share of less than 0.5%, but they can still be very competitive and give you great cover at cheap premiums.

Bupa, HBF, HCF, Medibank and NIB: good and bad points

Narrow down your health insurance options by comparing the pros and cons of the big five health funds.

Bupa

Good points
  • Low complaints rating.
  • Out-of-pocket rating: Above average in Queensland and Victoria; average everywhere else.
  • No excess for children on most hospital and combined policies.
  • Free cover for full-time students younger than 25 on family policies.
  • Extended family cover for families with other adult children younger than 25.
  • Discounts for people joining when aged 30 or younger.
Bad points
  • No direct debit or prepayment discounts.

HBF

Good points
  • Nonprofit.
  • Low complaints rating.
  • Out-of-pocket rating: Above average in the ACT and Western Australia; average everywhere else.
  • Only fund to cancel 2020 premium increase due to the COVID-19 pandemic.
  • Only fund so far that will pay a refund to members for extra profits resulting from COVID-19 shutdowns.
  • No excess for children on all hospital and combined policies.
  • Adult children younger than 25 are covered on family policies for free if they're full-time students or earning up to $24,500 per year.
  • Direct debit and prepayment discounts.
Bad points
  • No discounts for people joining when aged 30 or younger.
  • No extended family policies.

HCF

Good points
  • Nonprofit.
  • Out-of-pocket rating: Above average in New South Wales; average everywhere else.
  • No excess for children on all hospital and combined policies.
  • Free cover for full-time students younger than 25 on family policies.
  • Extended family policies for families with other adult children younger than 25.
Bad points
  • High complaints rating.
  • No direct debit or prepayment discounts.
  • No discounts for people joining when aged 30 or younger.

Medibank

Good points
  • Low complaints rating.
  • Out-of-pocket rating: Average in Victoria, Northern Territory, Tasmania and the ACT.
  • No excess for children on all hospital and combined policies.
  • Free cover for full-time students younger than 25 on family policies.
  • Extended family policies for families with other adult children younger than 25.
  • Discounts for people joining when aged 30 or younger.
Bad points
  • No direct debit or prepayment discounts.
  • Out-of-pocket rating: Below average in New South Wales, South Australia and Queensland; well below average in Western Australia.

NIB

Good points
  • Out-of-pocket rating: Average in New South Wales, Victoria, South Australia and Western Australia.
  • No excess for children on all hospital and combined policies.
  • Free cover for full-time students younger than 25 on family policies.
  • Extended family policies for families with other adult children younger than 25.
  • Discounts for people joining when aged 30 or younger.
  • Direct debit discounts.
Bad points
  • Out-of-pocket rating: Below average in Tasmania; well below average in Queensland, Northern Territory and the ACT.
  • No prepayment discounts.

Best funds for low complaints

Of the five big health funds, HBF, Bupa and Medibank had a low complaints rating in the 12 months to 30 June 2021, while HCF received a high rating, according to our analysis.

The complaints rating is based on complaints lodged with the Private Health Insurance Ombudsman. Want to see how other health funds fared beyond the big five? See our round-up of the four most complained about health funds.

Best funds for low out-of-pocket costs

Bupa, HBF and HCF are the best funds when it comes to low out-of-pocket costs.

We rate health funds for how likely they are to leave you 'out of pocket' for treatments, and we call this their 'gap rating' – the higher a fund's gap rating, the better it is.

Gap (out-of-pocket costs) ratings are calculated on a state basis.

Bupa

  • Above average in Queensland and Victoria.
  • Average everywhere else.

HBF

  • Above average in Western Australia and the ACT.
  • Average everywhere else.

HCF

  • Above average in New South Wales.
  • Average everywhere else.

Medibank

  • Average in Victoria, Northern Territory, Tasmania and the ACT.
  • Below average in New South Wales, South Australia and Queensland.
  • Well below average in Western Australia.

NIB

  • Average in New South Wales, Victoria, South Australia and Western Australia.
  • Below average in Tasmania.
  • Well below average in Queensland, Northern Territory and the ACT.

These ratings are based on the percentage of procedures in hospitals where members of the fund paid out-of-pocket costs (the gap payment).

Best funds for discounts

Direct debit and prepayment discounts

All health funds let you prepay your annual premium before 1 April each year to avoid the premium increase (until the following year).

HBF and NIB also offer a 4% discount if you pay by direct deposit, while HBF offers an additional 3.85% discount for prepaying your annual premium (giving a total possible 7.85% off). 

Corporate discounts

All the big funds have discount agreements with companies or organisations such as super funds, associations and clubs or banks. 

Be sure to ask your health fund what discounts they offer, as you may qualify for one without knowing it.

Discounts for students

Families pay the same premiums as couples, which means kids are insured for free. Most health funds let families keep their adult kids on their family policy for no extra charge until age 21. 

Adult children aged 21–24 are usually still covered for free if they're full-time students.

For children who aren't full-time students, some funds offer so-called 'extended family policies'. These will cost more than regular family policies (for example 25% more), but will be cheaper than paying for an additional single policy. 

It probably makes sense to keep adult children on your policy while there's no extra cost

It probably makes sense to keep adult children on your policy while there's no extra cost, but once you have to pay more, it's time to consider if their needs are actually the same as yours. 

You may want a Silver, Silver Plus or Gold policy, but for your adult children a Bronze policy, an extras-only policy or no health insurance at all might be more suitable at this stage of their life.

These considerations will become more important soon, because the government and health funds are extending the age for children to be covered on family policies to 30.

Some funds offer an extended family policy which includes cover for adult children up to the age of 25.

How the big funds cover adult children

  • Medibank, Bupa, HBF and NIB cover adult children on your family cover policy for free until they turn 21. 
  • HCF covers them until they turn 22.
  • Full-time students are covered on family policies by all five funds for free on family cover until they turn 25. 
  • HBF also covers adult children younger than 25 for free on family cover who don't study but earn no more than $24,500.
  • Medibank, Bupa, HCF and NIB offer extended family cover policies for some of their policies. They cost more than normal family cover policies and cover any adult children younger than 25.
  • If adult children are married or in a de facto relationship they can't be included on family cover.

No excess for children 

Another advantage for families is that on some hospital policies children aren't charged an excess should they have to go to hospital. 

Medibank, Bupa, HBF, HCF and NIB offer this on most of their hospital and combined policies.

Discounts for people aged 18 to 30

Medibank, Bupa and NIB are offering discounts to new customers who sign up before they turn 30. 

You can get 2% off your premium for every year you're below 30, up to a maximum of 10% for people aged 18–25. If you stay on that policy, you'll keep getting the full discount until you turn 41. 

All three funds let you keep the discount if you switch cover or if you currently hold a discount with another fund and switch to them.

Big funds return COVID-19 profits to customers

All five of the big funds have announced payments to their members to return extra profits they made during COVID-19 in 2020.

  • BUPA will return $120 million via cashback by the end of 2021. Between $15 and $110, on average $71 per policy. 
  • HBF returned $42 million via cashback in July/August 2021. Between $20 and $140, on average $89 per policy.
  • HCF will return $66 million by freezing premiums until 1 November 2022.
  • Medibank will return $105 million by deducting the amount from the next premium paid from October 2021. The payment is usually similar to five days' premium – it's up to $52 for extras only and up to $175 for hospital and extras combined. On average that's $25 for extras only per policy and $60 for hospital and extras combined per policy. 
  • NIB will return $15 million by deducting the amount from the next premium paid from September 2021, up to $64 for combined, up to $48 for hospital only and $13 for extras only, which is on average $22 per policy.

All of the biggest health funds released support packets for their members in 2020 when COVID-19 struck, and allowed affected members to suspend their policies or get cover for free for a period of time.

HBF was the only fund to fully cancel its 2020 premium increase. Medibank, Bupa, HCF and NIB, along with almost all other health funds, delayed their premium increase by six months until 1 October 2020. 

AHM, which is owned by Medibank, rolled over unused extras limits on 1 July 2020 so that members had until 31 June 2021 to use them.

Which big health funds are nonprofit?

HBF and HCF are the only large health funds that are nonprofit.

Medibank and NIB are listed on the stock exchange and pay dividends to their shareholders. Bupa is for-profit but it's part of the international Bupa Group that is nonprofit.

Of the smaller funds, most are nonprofit. 

However, these smaller funds are for profit:

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