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 insurers offering health insurance policies with open memberships. We then analysed subsets of their data, in conjunction with the latest Private Health Insurance Ombudsman State of the Health Funds Report 2024, 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;
• Discounts;
• Waiting periods;
• Member retention percentages;
• Customer service capabilities; and
• Reviews from Australia’s independent consumer review website, Product Review.

While many Australians comparing private health insurance policies will be curious about cost comparisons, we did not include a price metric in our analysis because the cost of health insurance varies widely among individuals, depending on age; pre-existing health conditions; services selected and even 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 five 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.

Two years ago, we made the decision to exclude Medibank Private from our list of insurers despite scoring highly on a handful of metrics, owing to the cyber security incident in 2022, 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 186 complaints against Medibank in relation to the data breach, with the report noted was …”a relatively small number given the size of the issue, but it is reasonable to assume that most complaints about the matter were made to the Office of the Australian Information Commissioner (OAIC).”

In June 2024, the OAIC has filed civil penalty proceedings in the Federal Court against Medibank Private in relation to its October 2022 data breach, and alleges that from March 2021 to October 2022, Medibank “seriously interfered with the privacy of 9.7 million Australians by failing to take reasonable steps to protect their personal information from misuse and unauthorised access or disclosure”.

Medibank Private has the largest market share of all the insurers at 27%, but with the court case ongoing Forbes Advisor Australia determined that it was prudent to continue to exclude Medibank from the  2024list, despite it performing well across a number of key metrics including:

• Some 83.8% of medical services fully covered.
• More than half of extras (52.4%) full covered.
• Some 90% of hospital visits fully covered.

Medibank Private’s inclusion on our list will be re-considered once the federal court case concludes.

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

Nevertheless, the federal government encourages the take-up of private health among those who can afford it by penalising high-income earners with the Medicare Levy Surcharge (MLS) if they don’t have some form of health coverage and rewarding those who do with a private health insurance rebate in their tax return.

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% and 1.5% depending on your income. And for every year after the age of 30 that you fail to take out private health insurance you will be slugged a premium loading of 2% per year. This is known as Lifetime Loading Cover and tops out at 70%.

And it appears this carrot-and-stick approach is working, according to APRA’s most recent quarterly study, with 12.2 million people, or 44.8% of the population covered by hospital treatment cover as of June 30. More than 54.5%, or 14.8 million, had some kind of general treatment cover.

Australia has an ageing population and the Federal Government’s aim is 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 and based on 2024 State of the Health Funds annual report.  Current as of October 2024