What’s the most popular health insurer in Australia?

Have you been looking at your options and wondering what the best health insurance fund for you is? It can be a tiring task, especially with so many insurers available in Australia. But if size matters to you, then you might be tempted to go with one of the most popular health insurance funds in Australia.

Given that our health insurance market is dominated by a few big players, we’re going to dig into five of the top funds by market share and what that means for you: the customer.

According to the latest figures from the ACCC, about 14.5 million Australians, or roughly 55% of the population, has some level of private health insurance – whether that’s hospital cover, extras or a combined policy. Many people take out private health insurance because it gives you so much better access to services than Medicare, our public healthcare system. While it does give some level of cover for many essential services, it’ll still leave you out of pocket for private hospital stays, specialist care, elective surgeries and much more.

With private health insurance you also won’t have to deal with the massive waiting times for treatments that those in the public system are stuck with. You also get more control over where and who you are treated by.

Then there are those who only take out basic hospital cover so they don’t have to deal with the tax man’s surcharges. The Australian government encourages everyone to take out private health insurance through initiatives like lifetime health cover (LHC) loading and the Medicare levy surcharge (MLS), all of which work to lessen the strain on the public healthcare system.

While there are literally dozens of health insurance companies to choose from here in Australia, a few of them really do dominate the market. Because they each have their own range of policies and services/inclusions, we thought it’d be a good idea to dive into the five most popular health insurance funds – so you don’t have to do any of the heavy lifting.

Medibank is one of the most recognisable health insurance brands in the country, and also one of the largest. Commanding a respectable 26.90% market share, it services more than 4 million customers year-round. Established in 1976 as a government-owned fund, Medibank was privatised in 2014 and transitioned to a for-profit structure. These days, it continues to offer a broad range of policies that cater to different life stages and budgets, including hospital cover, extras and combined packages.

So why is Medibank so popular? Aside from brand recognition, it also has competitively priced policies, a wide hospital network, as well as a reputation for solid customer service. Medibank policyholders also get access to extra health and wellness services, such as telehealth consultations and preventative care programs.

However, as a for-profit insurer, Medibank has to prioritise shareholder returns, which in some cases might mean you end up paying higher premiums compared to not-for-profit health funds. That being said, Medibank’s strong market presence and extensive services make it a popular choice for millions of Aussies – and it could be the right pick for you too.

Bupa holds the same market share as Medibank, and it’s similarly well known in health insurance circles. Originally founded in the UK, Bupa circumnavigated the globe in the 1970s in order to spread its offering to the Aussies. Ever since, it’s grown to become one of the country’s leading private health insurers. Like Medibank, it operates as a for-profit business and has a huge range of health insurance products to pick from.

Because Bupa is an international brand, it means policyholders can access healthcare services and specialists from all over the world – a unique benefit for Aussies who travel regularly or are currently living abroad. Domestically, Bupa also has a big network of private hospitals and health providers, which means you’ll have plenty of flexibility in choosing where you are treated, as well as your doctors and specialists.

HCF (Hospitals Contribution Fund) is the largest not-for-profit health insurer in Australia and has a tidy 10.70% market share right now. Established way back in 1932, HCF is to this day committed to returning surplus funds to its members via lower premiums and more benefits, rather than sending those profits to shareholders. If you love value for money and think member benefits are the most important part of private health cover, then this model could be for you.

With HCF you’ll still get to choose from a wide array of health policies, whether you’re after hospital, extras or both. The company has built a reputation for having great customer service and competitive pricing, and when you go with a not-for-profit insurer like HCF you’ll know that more of the premiums you pay are reinvested into your benefits.

nib (formerly Newcastle Industrial Benefits) is another recognisable health fund here in Australia. Another for-profit health insurer, it was founded in 1952 and has grown in leaps and bounds. It might be helpful to know that nib is also a major player in the international student and expat health insurance market.

With flexible and affordable health insurance policies, nib tends to target younger Aussies and people who just want basic to mid-level cover. But that doesn’t mean you won’t find comprehensive policies here too. As a future-forward insurer, there’s a strong emphasis on technology at nib, with a user-friendly mobile app and plenty of online tools to help members manage their policies and make claims quickly.

Rounding out our top five largest health funds is HBF, with a still very respectable 7.80% market share. Headquartered in Western Australia, HBF is a not-for-profit health fund that has been serving Australians since 1941. What’s interesting is that the majority of HBF members are actually based in WA, so if you’re a West Australian you know you’ll have access to a huge network of healthcare providers.

One of HBF’s strong points is its focus on community health and wellness initiatives. As a not-for-profit, HBF also reinvests its profits back into member benefits, which makes their pricing quite competitive and their claim payouts higher compared to some for-profit insurers.

Let’s start with the advantages:

• Access to a large network of healthcare providers.
• Comprehensive policy options.
• More flexibility with your treatment choices.
• No long wait times like the public healthcare system.
• Choose from a wide range of coverage levels and extras.

But there are also some potential downsides to choosing one of the most popular health insurers. For-profit insurers, in particular, tend to prioritise shareholder returns over member benefits, which could result in higher premiums or worse claim payouts. While the larger size of these insurers allows for economies of scale, it doesn't always translate to better value for you. Not-for-profit insurers, on the other hand, will reinvest profits back into member services.

Another consideration is customer service. While larger insurers have the resources to have 24/7 customer support and user-friendly online tools, their sheer size can sometimes mean you get a more impersonal customer experience compared to smaller, member-focused funds.

When it comes to choosing a health insurance provider in Australia, size isn’t everything. While the most popular funds we’ve covered here do indeed dominate the general health insurance landscape, they also have their own pros and cons.

Whether you’re taking out a policy for the very first time or looking to switch health funds, just make sure you consider your personal healthcare needs, your budget and the benefits you value most in a private health policy.