Non-Profit Health Insurance in Australia: What You Need to Know

When selecting a health insurance provider, Australians weigh multiple factors, including whether an insurer is for-profit or not-for-profit. This distinction matters if you prioritise how your provider allocates its revenue — whether back to you in the form of greater benefits and lower premiums, or to external shareholders.

This guide offers an updated overview of not-for-profit health insurance providers in Australia, explaining what sets them apart from their for-profit counterparts, and what has changed in the sector since 2023.

Key Points

• Not-for-profit health insurers reinvest surplus revenue towards members, usually in the form of lower premiums or more benefits.
• The total number of registered health funds has shifted following recent mergers — most notably Queensland Country Health Fund (QCH) merging into HBF, effective 30 June 2024.
• The Members Health Fund Alliance now represents 24 funds covering more than 5.4 million Australians.
• Not-for-profit funds may offer better value overall, but that doesn't mean they are always the best choice for every individual.

What is a not-for-profit health fund?

A not-for-profit health fund is an insurance provider that reinvests all its revenue back into covering member benefits and operational expenses, such as staff wages, rent, and marketing. Unlike for-profit insurers, which distribute profits to shareholders, not-for-profits are structured to return any surplus directly to members and/or retain it as reserves to sustain the fund.

These funds fall into two categories:

• Open funds: Accessible to the general public.
• Restricted funds: Available only to members of specific industries or associations (e.g. teachers, nurses, defence personnel).

Who represents these funds?

The Members Health Fund Alliance (formerly known as hirmaa) is the peak industry body representing not-for-profit, member-owned, regional, and community-based health insurers. As of 2026, the Alliance represents 24 funds covering more than 5.4 million Australians — up from 5 million in previous years.

These funds share a common ethic: putting members' health before profit. According to the Alliance, member funds consistently return a higher proportion of premiums as benefits compared to for-profit competitors, and report higher customer satisfaction and retention rates.

Which health insurance funds are not-for-profit?

Below is a current list of for-profit (FP) and not-for-profit (NFP) health insurance funds in Australia, updated to reflect recent mergers and rebrands. Two important changes since 2023:

• Queensland Country Health Fund (QCH) completed its merger into HBF on 30 June 2024. QCH continues to operate as its own brand from Townsville under the HBF umbrella.
• CUA Health was rebranded as see-u following its acquisition by HBF in 2022.

What's New in Health Insurance (2026 Update)

• Premium increase: Health insurance premiums rose by an average of 4.41% on 1 April 2026 — the largest increase since 2018, and higher than the 3.73% rise in 2025. Industry data suggests that because the five largest funds hold nearly 80% of the market, the average increase experienced by most policyholders is closer to 5.00%.
• HBF expansion: Following its acquisition of Queensland Country Health Fund (completed June 2024), HBF now covers more than 1.1 million members nationally, with Queensland becoming its second-largest state market.
• HCF membership milestone: HCF now covers more than 2 million members, up from approximately 1.9 million in 2023, cementing its position as Australia's largest not-for-profit health fund.
• Out-of-pocket costs rising: APRA data shows average gaps for hospital treatment rose 7.7% in 2025. With cost-of-living pressure ongoing, now is a good time to review whether your policy still represents value.

Frequently Asked Questions

What's the difference between for-profit and not-for-profit health funds?

The primary difference is in how surplus revenue is handled:

• For-profit health funds aim to generate profits, distributing surplus income to shareholders after covering claims and operational expenses.
• Not-for-profit health funds only seek to cover costs. Any surplus is typically reinvested to benefit members — through lower premiums, expanded coverage, or enhanced services.

Some not-for-profit funds claim to offer better value by reinvesting surplus revenues and maintaining a higher payout ratio of premiums to benefits. On average, Members Health funds return a higher proportion of premiums as benefits than their for-profit counterparts.

Are not-for-profit health funds cheaper?

Not necessarily. The cost of your premium is influenced by several factors, including your level of cover, your location, and the competitiveness of the fund. However, not-for-profit funds may offer better overall value through higher benefit returns and more comprehensive services, which can reduce your out-of-pocket expenses over time.

What is the largest not-for-profit health fund in Australia?

HCF (the Hospitals Contribution Fund of Australia) is Australia's largest not-for-profit health fund. As of 2026, HCF covers more than 2 million members and has won Canstar's Outstanding Value Health Insurance Award ten years in a row (2016–2025). HCF was also recognised by Roy Morgan as Australia's Most Trusted Brand in Private Health Insurance for 2025.

What are the benefits of joining a not-for-profit health fund?

• Higher return of premiums as benefits: On average, not-for-profit funds return more of members' premiums in the form of benefits compared to the industry average.
• Higher customer satisfaction: Members Health funds report average customer satisfaction rates of 87% or higher — above the industry norm.
• Member focus: Because there are no shareholder returns to fund, surplus revenue is directed back to members through lower premiums, improved services, or fund reserves.

What are the drawbacks of not-for-profit health funds?

• Limited provider networks: Not-for-profit funds make up a smaller portion of the overall market, which can mean fewer policy options or more limited preferred provider networks in some areas.
• Sustainability concerns: APRA has previously flagged concerns about the long-term viability of some smaller not-for-profit funds, citing restricted revenue streams and limited access to capital. The recent wave of mergers (such as QCH into HBF) reflects this ongoing consolidation trend.

Conclusion: What matters most when choosing a health fund?

When choosing a health insurance provider, how your fund operates is important — but it's only one piece of the puzzle. The not-for-profit model has clear structural advantages, including a member-first ethos and historically higher benefit returns. However, the best policy for you depends on your individual circumstances: your health needs, budget, location, and the specific cover options available to you.

With premiums rising and the number of funds shrinking through consolidation, it's worth reviewing your cover regularly. Comparing different options — whether for-profit or not-for-profit — will help ensure you're getting the best value health insurance for you and your family.

This guide is general in nature and should not be taken as financial advice. Check with a financial or health insurance professional before making any decisions.