Our Pick Of The Best Private Health Insurance Providers In Australia

To find and rank the best private health providers, we conducted an analysis of more than 20 of the most popular Australian brands offering health insurance policies. We then analysed subsets of their data, in conjunction with the latest Private Health Insurance Ombudsman State of the Health Funds Report 2022, which is the most recent iteration.

“The Ombudsman Act requires the Private Health Insurance Ombudsman (PHIO) to publish the report after the end of each financial year to provide comparative information on the performance and service delivery of all health insurers during that financial year,” Acting Commonwealth Ombudsman Penny McKay explains in her foreword.

Ultimately, the State of the Health Funds Report provides consumers with the information they may require to make an informed decision on the right health insurance provider for them, which is established by comparing the following criteria:

• Service performance and financial management;
• Hospital benefits;
• Medical gap schemes;
• The number and nature of complaints investigated by the Ombudsman; and
• General treatment (extras) benefits.

In addition to the comparisons and conclusions found within this report, Forbes Advisor also analysed the following criteria of each health insurer:

• Market share;
• Waiting periods;
• Member retention percentages;
• Discounts;
• Customer service capabilities; and
• Reviews from Australia’s leading and independent consumer review website.

While many Australians seeking private health insurance policies will be curious about cost comparisons, we did not include a price metric in our analysis. This is because the cost of health insurance varies widely among individuals, as it depends on numerous factors including age, pre-existing health conditions, desire for additional services and location.

To rank each private health insurer, a total of 13 variables were evaluated. From these variables, rankings were then made on a basis of 5 stars–with those included in our best-of list sitting at 2.5 stars and above.

About Star Rankings
You will note that we have included a star rating next to each product or provider. This rating was determined by the editorial team once all of the data points above were considered, and the pros and cons of each product attribute was reviewed. The star rating is solely the view of Forbes Advisor editorial staff. Commercial partners or advertisers have no bearing on the star rating or their inclusion on this list. Star ratings are only one factor to be considered, and Forbes Advisor encourages you to seek independent advice from an authorised financial adviser in relation to your own financial circumstances and investments before you decide to choose a particular financial product or service.

As mentioned above, Forbes Advisor decided against including Medibank Private in our pick of insurers owing to the cyber security incident last year, in which the details, including the health records, of millions of Australians were stolen. The response prompted the federal government to increase penalties for companies that don’t properly store customer details, and the Private Health Insurance Ombudsman noted in its annual report that they had received 100 complaints against Medibank in relation to the data breach by the end of the year.

As it noted: “The privacy and data aspects of this matter fall outside the Office’s jurisdiction. However, it remains an issue of concern to consumers and Medibank policy holders can ask the Office for help about a broad range of issues and access our services if they are unsatisfied with a response to a problem raised with their insurer.”

The Ombudsman also addressed the issue of the data breach more broadly.

“One theme in the complaints made to the Office by both current and former members of Medibank was the extent of the historical data retained by Medibank and the length of time it was retained,” it said.

“Some consumers whose details were stolen had not been members of Medibank for several years. Some state and territory regulations determine the length of time that data must be retained before it can be destroyed, and Australian insurers are required to keep some basic information including length and type of membership indefinitely for purposes such as Lifetime Health Cover (LHC) records.

“However, some complainants felt data may have been retained by Medibank beyond the minimum requirements and suggested that, if data been appropriately destroyed or de-identified at an earlier stage, the impact of the data theft would have been mitigated.”

In Australia, private health insurance is optional thanks to our public healthcare system.

However many individuals choose to take out private health insurance from one of the aforementioned providers due to their additional benefits, such as the ability to receive care in a private hospital, quicker treatment for non-life threatening procedures, and to avoid paying for treatments that are not covered by Medicare.

Those without private health insurance will be treated in public hospitals and, if additional services or treatments are required that are not covered by Medicare, they will be charged 100% of the bill.

Ultimately, deciding on whether to pay for private health insurance over Australia’s free-to-access public healthcare system comes down to personal health needs, income and age. For example, if you earn above $90,000 per year as a single, and do not take out basic hospital cover, you will be slugged the Medicare Levy surcharge of between 1-1.5% depending on your income.

Why? The Federal Government is trying to entice as many higher-income earners as possible to pay for some level of private health insurance so the public system is reserved for those who cannot afford private healthcare.

Depending on which type of private health insurance policy you choose will determine what your health insurance will cover. Your cover can include treatment in private hospitals with private rooms, ambulance services, or for treatments such as physiotherapy or dental care. The types of health insurance policies available on the Australian market are hospital-only cover, extras-only cover, and combined hospital and extras policies.

Types of health insurance policies

• Hospital-only cover: helps to avoid public hospital waiting lists, and offers more options in terms of being able to choose your desired specialist and hospital. Your private health insurer pays benefits toward the cost of private treatment in a hospital.
• Extras-only cover: helps pay for treatments that are not covered by Medicare and take place outside of the hospital. This includes services and treatments such as dental care, physiotherapy, and optical needs. Most policies pay back a percentage of the bill after it has been paid in full (rather than covering the service in its entirety), and annual limits for each service apply.
• Combined hospital and extras: covers out-of-hospital treatments for the extras described above, as well as for hospital treatments in private hospitals. These policies are bundled together at varying levels of coverage for different procedures, and varying amounts of extras.

Data research by Mia Dunn