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Not-for-profit health funds
As many as 36% of people are more likely to choose a not-for-profit health fund, but what are the advantages? Find out and compare your health insurance options below.
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What are not-for-profit health funds?
A not-for-profit health fund sells a health insurance product, but isn't trying to make money for owners or shareholders. Instead, any remaining profits are put toward improving the service reducing premiums. This is unlike a for-profit health fund, which is owned by outside interests and makes a profit out of members' premiums to provide a return to its owners and/or shareholders.
Many not-for-profit health funds are open to anyone - such funds include like HCF, Frank Health Insurance, HBF and Westfund. Others, however, restrict membership to people from a particular employment group or professional association - some restricted health funds include Teachers Health, Defence and Police Health.
Are not for profit health funds cheaper?
Not-for-profit health funds are sometimes cheaper than for-profit funds, but not always. While not-for-profit funds use profits to lower premiums, they tend to be smaller than for-profit funds. This means they may not have the scale to lower costs like larger funds can. Even so, not-for-profit funds are generally competitive on price.
List of not-for-profit health insurers
According to privatehealth.gov.au, these funds report as a mutual organisation that operates on a not-for-profit basis:
|Health Fund||Bronze Policies Available||Silver Policies Available||Gold Policies Available||Extras Policies Available||Apply|
|Peoplecare Health Insurance||1||2||1||4||More info|
CBHS Health Fund
|Defence Health||1||1||1||3||More info|
|Emergency Services Health||None||None||1||1||More info|
|Health Partners||1||2||1||4||Get quote|
|Latrobe Health Services||2||2||1||7||More info|
|Mildura Health Fund||None||None||1||4||More info|
|Nurses & Midwives Health||None||2||1||2||More info|
|Phoenix Health Fund||3||3||None||3||More info|
|Police Health||None||None||1||1||More info|
|RT Health Fund||2||1||1||3||More info|
|St.Lukes Health||2||3||1||1||More info|
The list of restricted not-for-profit funds which limit membership to certain groups includes:
Note: Doctors' Health is a for-profit fund that is owned by the Avant Mutual Group, a group that operates on a not-for-profit basis.
What are the differences?
There are several differences between not-for-profit and for-profit health funds.
- They have different business structures – a not-for-profit is a mutual organisation, while a for-profit is often a corporation with owners and shareholders.
- Not-for-profit funds sometimes have lower premiums. Because they exist solely to benefit members, they return a higher percentage of funds to their members in the form of cheaper premiums. However, smaller not-for-profit funds may not have the scale to compete with larger funds on price.
- Not-for-profit funds often have better benefits – because all monies are returned to the fund, any surplus is spent on improving member benefits.
- Not-for-profit funds can have more flexible terms – conditions such as excesses, waiting periods and pre-existing conditions are sometimes reduced or waived altogether.
Is a not-for-profit fund right for you?
In a recent Finder survey, participants were asked if they would be more likely to choose a not-for-profit health insurer over a for-profit one. Not surprisingly 36.4% said yes, but more interestingly, 27.4% said they didn't know there were not-for-profit health insurers out there.
Before you rush out and look for a not-for-profit health fund to join, you should keep the following things in mind:
- While most restricted funds are open to family members, this may be limited to immediate family only (ie, spouse and dependent children).
- Previous employment in an industry can go back a number of years, so you may be eligible to join a restricted fund even if you haven’t worked in an industry for some time.
- Membership of a restricted health fund can sometimes also give you access to other member benefits like industry super and life insurance.
- Cheaper premiums should only be one consideration when looking at not-for-profit health funds. You also need to ensure the level of cover on offer is adequate for your needs.
Compare more health insurance options
In 5 clicks you can compare health cover available from Australian funds. To search for a not-for-profit fund, simply select funds and choose your provider on the results screen.
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