Which health fund pays the most benefits?

Richard Laycock 13 March 2017 NEWS

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What percentage of member contributions does your fund pay back in benefits?

There are many ways to assess how well a health fund is performing, from a fund's market share to its annual revenue. However, most of the markers aren't all that useful if you're a consumer in the market for a new health insurance policy.

The Private Health Insurance Ombudsman (PHIO) has been publishing its annual State of the Health Funds report since 2004. In these reports, the PHIO looks at various markers for how well a fund is performing through the lens of a consumer. These markers include member retention, complaints and, importantly, benefits paid as a percentage of contributions.

In the report each year, the PHIO records the percentage of total contributions received by the fund and returned to contributors in the form of benefits.

Each year on 1 April, funds increase their premium rates to keep pace with rising health care costs and other factors. Generally, a fund sets its premiums so that the contributions it will receive from its members will cover the costs it expects to payout in the form of benefits over the coming year, plus administrative expenses.

The table below displays how health funds have performed historically, that is, the average percent of total contributions returned in benefits.

Fund Average
ACA (Restricted) 89.25%
Australian Unity 83.06%
BUPA 84.30%
CBHS (Restricted) 91.88%
CDH 89.07%
CUA Health 86.03%
Defence Health (Restricted) 90.61%
Doctors’ Health (Restricted) 82.55%
GMHBA 88.02%
GU Corporate 76.62%
HBF 85.80%
HCF 90.70%
HCI 87.43%
Health Partners 89.67%
Health.com.au 95.55%
Healthguard 83.31%
HIF 82.63%
Latrobe 85.39%
MDHF 87.01%
Medibank 86.39%
Navy Health (Restricted) 84.66%
NIB 85.55%
Onemedifund 72.01%
Peoplecare 87.38%
Police Health (Restricted) 88.33%
Queensland Country Health Fund 80.50%
Reserve Bank (Restricted) 86.96%
RT Health Fund (Restricted) 86.24%
St. Lukes 83.57%
Teachers Health (Restricted) 92.88%
Transport 86.60%
TUH (Restricted) 87.49%
Westfund 84.85%

While it is a good sign to see a fund returning a high percentage of contributions in the form of benefits, it is not always a positive. This is especially true if the fund is making a loss.

When looking at these figures, it's best to also review whether the fund is operating at a surplus and what its management expenses are, both of which will be addressed in future instalments.

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2 Responses

  1. Default Gravatar
    March 18, 2017

    Can you send me a Cover Summary for Top Hospital and a cover Summary for Top Extras 75% i.e. Combined Hospital and Extras cover.

    • finder Customer Care
      ZubairMarch 22, 2017Staff

      Hi Philomena,

      Thank you for your question.

      You have contacted finder.com.au, a comparison and information service and not an insurer.

      Which fund were you referring to?

      If you would like to compare Hospital and Extras policies from Australian health funds, please enter your details into quote comparison tool on this page.

      All the best,

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