Not-for-profit health funds

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
HCF	1	4	1	10	Get quote
Peoplecare Health Insurance	1	2	1	4	More info
HBF	1	2	1	5	Get quote
GMHBA	2	4	2	6	More info
ACA	1	None	2	2	More info
CBHS Health Fund	1	1	1	3	More info
CDH	1	3	1	4	More info
Defence Health	1	1	1	3	More info
Emergency Services Health	None	None	1	1	More info
Frank	2	2	None	7	Get quote
Health Care Insurance	1	1	1	3	More info
Health Partners	1	2	1	4	Get quote
HIF	2	2	1	6	More info
Latrobe Health Services	2	2	1	7	More info
Mildura Health Fund	None	None	1	4	More info
Navy Health	1	1	1	3	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
RBHS	None	None	1	1	More info
St.Lukes Health	2	3	1	1	More info
Teachers Health	None	1	1	3	More info
TUH	1	2	1	6	More info
UniHealth	None	1	1	2	More info
Westfund	1	2	1	5	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.

_{Source: http://www.ombudsman.gov.au/publications/state-of-the-health-funds-report/2017-state-of-the-health-funds-report#sec6}

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.