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Not-for-profit health insurance
Although you may think that private health insurance providers operate for profit, it isn’t always the case. So what is not-for-profit health insurance?
18 June 2025
Although you may think that private health insurance providers operate for profit, it isn’t always the case. So what is not-for-profit health insurance?
KEY POINTS
- A not-for-profit health fund uses its revenue only to pay benefits to members and cover operating costs.
- Many of Australia’s not-for-profit health insurance providers are part of the Members Health Fund Alliance.
- Not-for-profit health insurance providers are not necessarily cheaper than for-profit ones.
What is a not-for-profit health fund?
A not-for-profit health fund is a health insurance provider that uses its revenue only to pay benefits to members and to cover operating costs, such as marketing, paying staff, rent and other overheads.
Membership of a not-for-profit fund may be available to anyone, or only to individuals in a certain industry or association—known as ’restricted’ funds.
Many of Australia’s not-for-profit health funds are part of the Members Health Fund Alliance—the peak industry body for 25 health funds that are not-for-profit or part of a not-for-profit group, member owned, regional and community based. It says more than five million Australians are with one of its funds.
What are the not-for-profit health funds in Australia?
The following health funds operate in Australia on a not-for-profit basis, according to the Federal Government’s privatehealth.gov.au website. ‘Not-for-profit’ means it’s a mutual organisation, with the premiums paid into the fund used to operate the business and cover benefits for members. Funds are noted as ‘restricted’ if membership is limited to certain groups or industries, and ‘open’ if anyone can apply for cover.
List of health insurers in Australia according to profit status
Type Key: R = Restricted, O = Open
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| Insurer | For Profit? |
Type |
|---|---|---|
| ACA Health Benefits Fund | Not for Profit | R |
| ahm health insurance | For Profit | O |
| AIA Health Insurance Pty Ltd |
For Profit | O |
| Australian Unity Health Limited |
For Profit | O |
| Bupa HI Pty Ltd | For Profit | O |
| CBHS Corporate Health Pty Ltd |
For Profit | O |
| CBHS Health Fund Limited |
Not for Profit | R |
| CDH Benefits Fund | Not for Profit | O |
| Defence Health Limited |
Not for Profit | R |
| Doctors’ Health Fund | For Profit | R |
| GMHBA Limited |
Not for Profit | O |
| GU Health | For Profit | O |
| HBF Health Limited |
Not for Profit | O |
| HCF | Not for Profit | O |
| HCi | Not for Profit | O |
| Health Insurance Fund of Australia Limited |
Not for Profit | O |
| Health Partners | Not for Profit | O |
| Latrobe Health Services | Not for Profit | O |
| Medibank Private Limited |
For Profit | O |
| Mildura Health Fund | Not for Profit | O |
| National Health Benefits Australia Pty Ltd (onemedifund) |
For Profit | O |
| Navy Health Ltd |
Not for Profit | R |
| nib Health Funds Ltd. |
For Profit | O |
| Peoplecare Health Insurance |
Not for Profit | O |
| Phoenix Health Fund Limited |
Not for Profit | O |
| Police Health | Not for Profit | R |
| Queensland Country Health Fund Ltd |
Not for Profit | O |
| Reserve Bank Health Society Ltd |
Not for Profit | R |
| RT Health – a division of The Hospitals Contribution Fund |
Not for Profit | O |
| see-u by HBF | Not for Profit | O |
| St Lukes | Not for Profit | O |
| Teachers Health | Not for Profit | R |
| TUH Health Fund | Not for Profit | R |
| Westfund Limited | Not for Profit | O |
Source: https://www.privatehealth.gov.au/dynamic/insurer as at 17/06/2025. Funds listed alphabetically.
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Psychiatric services
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Psychiatric services
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General dental
Physiotherapy
Psychiatric services
Rehabilitation
General dental
Physiotherapy
Psychiatric services
Rehabilitation
General dental
Physiotherapy
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Optional
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What is the difference between for-profit and not-for-profit health funds?
The main difference is what the funds do with the money they make:
- For-profit funds aim to make a profit from the premiums paid by their members, after benefit payments and operating costs are taken into account.
- Not-for-profit funds typically only need enough revenue to cover costs.
As a result, some not-for-profit funds say they reinvest surplus revenue, which enables them to lower their premiums, have wider or more comprehensive features and services on offer, or return a greater percentage of premiums to members in the form of benefits.
Are not-for-profit health funds cheaper?
Whether a fund is for-profit or not can influence how much it charges its members in premiums, but it doesn’t necessarily mean that not-for-profit funds are cheaper.
Ultimately your premiums will be influenced by the level of cover you want and how competitive the fund’s products are generally. It could also potentially be influenced by the range of providers that operate in your state or territory.
Do not-for-profit funds offer more coverage?
Not-for-profit health funds don’t necessarily offer more coverage than for-profit funds. This may be due in part to the Federal Government’s implementation of hospital product tiers, classifying policies into either Gold, Silver, Bronze or Basic tiers. This helps better outline what medical treatments are covered under certain tiers of coverage and bring consistency to the industry.
Many not-for-profit health funds prioritise member benefits over turning profits for shareholders, which may lead to more competitive cover and lower premiums.
Not-for-profit health funds vs for-profit health funds
The Private Health Insurance Ombudsman (PHIO) releases an annual State of the Health Funds Report which details the performance of each health fund that operates in Australia. The information shows how each fund stacks up on metrics such as member retention, benefits as a percentage of contributions and the percentages of both hospital and general treatment (extras) charges that are covered. While these aren’t the only metrics you should consider when comparing health funds and policies, they may give you a better idea on how funds provide value to their members.
The data below has been split into not-for-profit health funds and for-profit health funds, which should give you a better idea of how they stack up against each other when comparing these metrics.
Not-for-profit health funds
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| Health Fund |
Member retention (hospital cover) |
Benefits as % of contributions |
% Hospital related charges covered |
% General treatment (extras) charges covered |
|---|---|---|---|---|
| ACA (R) |
92.70% | 79.90% | 93.10% | 55.70% |
| CBHS (R) |
91.40% | 87.10% | 89.70% | 45.80% |
| CDH | 89.20% | 75.50% | 94.20% | 32.90% |
| Defence Health (R) |
92.00% | 85.00% | 91.80% | 43.10% |
| GMHBA | 80.70% | 80.70% | 89.30% | 46.60% |
| HBF | 88.90% | 83.60% | 93.10% | 54.10% |
| HCF | 87.10% | 89.00% | 88.90% | 50.40% |
| HCI | 85.10% | 79.30% | 91.00% | 45.60% |
| Health Partners |
89.90% | 84.30% | 92.30% | 56.50% |
| HIF | 75.00% | 80.50% | 89.30% | 45.70% |
| Latrobe Health |
77.10% | 79.40% | 88.90% | 39.20% |
| Mildura Health Fund (MDHF) |
90.70% | 83.40% | 90.50% | 53.20% |
| Navy Health (R) |
88.40% | 84.60% | 89.20% | 46.80% |
| Peoplecare | 85.20% | 79.30% | 90.50% | 42.40% |
| Phoenix Health Fund |
83.90% | 79.00% | 89.90% | 53.60% |
| Police Health (R) |
91.20% | 93.90% | 91.20% | 64.30% |
| Queensland Country Health Fund |
N/A | 79.70% | 86.50% | 46.50% |
| Reserve Bank Health Society (R) |
90.80% | 76.80% | 92.70% | 68.60% |
| St Lukes | 88.60% | 82.70% | 91.00% | 55.50% |
| Teachers Health (R) |
91.90% | 89.00% | 90.10% | 43.30% |
| TUH Health Fund (R) |
90.50% | 82.90% | 89.30% | 51.00% |
| Westfund | 86.70% | 82.40% | 90.10% | 44.50% |
Source: Commonwealth Ombudsman, State of the Health Funds Report 2023-24 (released March 2025). Data accessed June 2025. QCH merged with HBF effective 30 June 2024, so member retention is not applicable. (R) refers to health funds that are restricted in nature.
For-profit health funds
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| Health Fund |
Member retention (hospital cover) |
Benefits as % of contributions |
% Hospital related charges covered |
% General treatment (extras) charges covered |
|---|---|---|---|---|
| AIA Health | 68.30% | 88.00% | 79.20% | 45.20% |
| Australian Unity |
82.30% | 81.90% | 89.30% | 50.50% |
| Bupa | 87.00% | 82.60% | 89.50% | 50.10% |
| CBHS Corporate |
64.50% | 79.90% | 85.10% | 45.00% |
| Doctors’ Health Fund (R) |
90.10% | 81.20% | 92.20% | 51.60% |
| Medibank | 85.50% | 84.90% | 89.70% | 52.40% |
| Onemedifund | 93.40% | 74.90% | 92.50% | 46.80% |
| NIB | 81.30% | 80.80% | 85.50% | 57.50% |
Source: Commonwealth Ombudsman, State of the Health Funds Report 2023-24 (released March 2025). Data accessed June 2025. (R) refers to health funds that are restricted in nature.
What are the benefits of being a member of a not-for-profit health fund?
According to the Members Health Fund Alliance, the potential benefits of being a member of one of its funds include:
- High insurance premium returns: On average, they return more of members’ premiums back in insurance benefits.
- High customer satisfaction: Customer satisfaction rates among members are 87% or higher, on average.
What are the drawbacks of being a member of a not-for-profit health fund?
Some of the possible drawbacks of being with a not-for-profit health fund include:
- Smaller selection of providers: Not-for-profit health funds constitute a smaller proportion of the health insurance market than their for-profit counterparts, so those wanting to join may end up with a narrower range of policies and products to choose from.
- Concerns over sustainability of some of these funds: Australian Prudential Regulation Authority (APRA) has warned that the business model of not-for-profit health funds may prove unsustainable, due to their generally lower revenues and lack of access to alternative capital.
Whenever you’re choosing a health insurance policy, it’s always a good idea to shop around and compare your options. It may prove beneficial to consider a variety of factors—such as the value a policy offers you and its suitability to your circumstances—not just the fund’s business structure. It’s important to read the policy documentation, such as the Private Health Information Statement (PHIS) and Target Market Determination (TMD), for any policy you’re considering.
Psychiatric services
Rehabilitation
General dental
Physiotherapy
Psychiatric services
Rehabilitation
General dental
Physiotherapy
Psychiatric services
Rehabilitation
General dental
Physiotherapy
Psychiatric services
Rehabilitation
General dental
Physiotherapy
Psychiatric services
Rehabilitation
General dental
Physiotherapy
Psychiatric services
Rehabilitation
General dental
Physiotherapy
Included
Not Included
Optional
Data not captured
Restricted
Canstar Star Rating
Cover image source: photobyphotoboy/Shutterstock.com
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.
- What is a not-for-profit health fund?
- What are the not-for-profit health funds in Australia?
- What is the difference between for-profit and not-for-profit health funds?
- Are not-for-profit health funds cheaper?
- Do not-for-profit funds offer more coverage?
- Not-for-profit health funds vs for-profit health funds
- What are the benefits of being a member of a not-for-profit health fund?
- What are the drawbacks of being a member of a not-for-profit health fund?
Psychiatric services
Rehabilitation
General dental
Physiotherapy
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