Health insurance is health insurance – right? Wrong. Just like Australia’s super funds, health insurance in this country is divided into two distinct groups – one group that runs for-profit, and the other that runs entirely for the people.
Until recently, health insurance funds run for members, not-for-profits had been one of Australia’s best kept secrets, but that trend is now on the turn. Despite the so-called ‘death spiral’ of private health insurance in Australia, the Members Health Fund Alliance (MHFA) reports a growing membership of savvy younger people who are tuning into the benefits. In fact, new research shows more than 30,000 people aged under 40 have signed up to Members Health funds in the past two years, going against a broader decline across the industry.
So, what’s the difference and how can you benefit?
Many of the big-name health funds you might be familiar with fall into the for-profit category. That includes big ASX corporations and it means the company’s main objective is to make a profit for shareholders. Higher profits can also mean higher advertising budgets, which may help explain why so many Australians consider these brands household names.
On the other side of the fence, not-for-profit health funds or funds that are part of a not-for-profit group have long been quietly providing their members with excellent bang for every buck.
Members Health Fund Alliance chief executive Matthew Koce says there’s a good reason why their membership base is growing more than twice as fast as its for-profit competitors.
“These not-for-profit funds don’t have to deliver returns to shareholders or overseas investors so can return all their revenue into paying benefits back to members and covering operating costs. They’re able to run on very low profit margins.
“What we’re seeing is young people making the best choice for their hip pockets, but there’s perhaps something more philosophical at work too. Why give your money to shareholders and overseas investors when you can give it to an organisation that is working for you?”
Members Health represents 27 health insurers that put people before profits. Research shows that as a group, Members Health funds not only have more loyal and satisfied customers and score significantly better on customer service ratings, most importantly a higher percentage of premiums is returned to members. In fact, Members Health fund policyholders on average receive an incredible 91% of their premiums back through benefits.
If you are not already with a Members Health fund, now is the perfect time to consider shifting funds, with annual changes to private health insurance premiums taking effect April 1.
Learn more and find the right fund for you here.