How your family benefits from being with a member-owned health fund
Ben Thomas,
Customer Experience Manager
Health Insurance Expert, who’d sign up for that job title? Ben Thomas did in 2008 and hasn’t looked back.

Choosing the right health cover for your family is tricky. Almost every health fund in Australia offers the same types of cover at about the same price, so in one sense it doesn’t really matter which fund you’re with. But ignoring the way your health fund is run means ignoring the approach they take to you, the member.


One approach is to forget about the hundreds of policies for a moment and start by eliminating funds that aren’t 100% run to benefit you.
Related: Family Health Insurance – Everything You Need To Know

There are two types of health insurer operating in Australia, and they’re in business for different reasons. Until recently all private health funds in Australia were member-owned, run as non-profit or mutual companies. Many were set up in regional areas by members of a local workforce to provide for fellow workers and their families in times of ill-health, but the market has changed significantly in the last 10 years and now over 60% of all insured persons are with a for-profit health fund.

For-profit funds…Member-owned funds…
…like Bupa, Medibank/ahm and NIB exist to produce dividends and profits from your premiums for their investors and/or overseas owners. They’re in business to make a profit from you.

…like the Members Own funds are run to benefit their members. They make yearly profits too, but they return them to members in the form of keeping premiums low, offering more benefits and strengthening the fund’s capital reserves to ensure its future success and stability. They’re in business to make a profit for you.

So what does this mean for you and your family?

When you’re with a Members Own fund, your family is the priority

First of all, member-owned health funds spend no time or money at all looking after the financial interests of their investors and overseas shareholders – because there aren’t any. Instead, member-owned funds spend all their time and resources looking after their members’ interests – people like you and your family.

As a result, you know that 100% of your premiums are being used to run the fund, improve customer service, provide greater coverage and pay your claims. This is a key difference between being with a for-profit and being with a member-owned fund.

When you’re with a Members Own fund, your family gets more back

Secondly, government data shows that the group of Members Own health funds on average returns a higher percentage of premiums to their members in benefits than one of the big for-profit groups.

Benefits paid as a percentage of premiums
(Average of cumulative 2011-2015 financial years)
Members Own funds
(18 brands)
For-profit group
(Medibank, ahm, Bupa, NIB)

The difference between the groups doesn’t seem significant at first, yet when you consider it in dollar terms the results are an eye-opener. In the 2015 financial year the difference was 2.9%, which equates to around $375 million of the $12 billion premium revenue received by the for-profit group of funds that year. Only the for-profit funds can answer the question of where that $375m went, but one thing is certain: it was not paid in benefits that year to the families who are members of those funds.

When you’re with a Members Own fund, you’re in good hands

Thirdly, when you’re investing in your family’s health you need to know that you’ve invested your money wisely and safely. All Australian health funds, including all the Members Own funds, operate under Australian Government legislation and are accountable to the Government’s Private Health Insurance Ombudsman (PHIO).

You and your family can rest assured that all of the Members Own funds have a long, reliable history and they all meet the same solvency, capital adequacy and governance standards as the household name for-profit brands.

When you’re with a Members Own fund, you’re more satisfied

Finally, customer satisfaction is not something you associate with big for-profit companies, but it means the world to the Members Own funds. Your family’s health and satisfaction is at the heart of why they are in business. This also is backed up by data: collectively the Members Own funds have higher customer retention rates, higher Net Promoter Scores and lower complaint rates.

Member retention rate in 2015 financial year
Members Own funds
(18 brands)
For-profit group
(Medibank, ahm, Bupa, NIB)
Percentage of Level 3 member complaints made to Private Health Insurance Ombudsman in 2015 financial year
Members Own funds
(20.5% combined market share)
For-profit group
(63.3% combined market share)

It’s no wonder that the member-owned segment is the fastest-growing segment in the Australian health insurance marketplace. Right now around 21% of all health insurance members in Australia are with one of the 19 Members Own Health Funds brands and hundreds more are switching to one of them every week. There’s no reason why you can’t be part of that 21%.

It doesn’t matter whether you’re new to health insurance or considering switching. If service, benefits and value are important to you and your family, your first task is a simple one. Choose one of the Members Own health funds, not a fund that’s run for profit.