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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: 03 June 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 the Australian marketplace, with more than half of the health insurance market between them.

  • Medibank (including AHM) – 27% market share
  • 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

In this article, we take a look at how the big funds compare on complaints, discounts and cost.

The Big 5: Good and bad points

Here are the pros and cons of the big five health funds – we've listed them in alphabetical order.

Bupa

Good points
  • 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 ACT and WA; average everywhere else
  • Only fund that cancelled 2020 premium increase because of COVID-19 pandemic
  • Only fund so far that will pay a refund to members for extra profits because of 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 NSW; 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
  • No direct debit or prepayment discounts
  • No discounts for people joining when aged 30 or younger

Medibank

Good points
  • 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 NSW, South Australia and Queensland; well below average in WA

NIB

Good points
  • Out-of-pocket rating: Average in NSW, Victoria, South Australia and WA
  • 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 for low complaints

While none of the biggest health funds have a bad complaints rating, HBF is best, according to our analysis.

  • HBF has a low complaints rating
  • Bupa, Medibank, HCF and NIB all have a medium complaints rating

The complaints rating is based on complaints lodged with the Private Health Insurance Ombudsman. See our round-up of the six most complained about health funds.

Best for low out-of-pocket costs

Bupa, HBF and HCF are best for low out-of-pocket costs.

We rate health funds for how likely they'll leave you 'out of pocket' for treatments.

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 WA and ACT
  • Average everywhere else

HCF

  • Above average in NSW
  • Average everywhere else

Medibank

  • Average in Victoria, Northern Territory, Tasmania and the ACT
  • Below average in NSW, South Australia and Queensland
  • Well below average in WA

NIB

  • Average in NSW, Victoria, South Australia and WA
  • 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 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; and 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.

HBF best in pandemic

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. And while all health funds had lower claims during 2020, HBF is so far the only fund to announce a refund of surplus profits to members. 

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 have 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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