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Health Insurance Funds

Private Health Insurance is provided through organisations registered underFederal Government legislation. The financial performance of registered health funds is independently monitored to ensure solvency and capital adequacy requirements are met.

Australia's health insurance funds are registered either as:

  • an open membership organisation - approximately 24 funds (anyone can apply to join); or
  • a restricted membership organisation - approximately 13 funds(available only through specific employment groups, professional associations or unions).

Health funds follow a legislated principle known as 'community rating'. Under this principle the premiums charged by the funds do not vary according to the members age (other than age at entry), sex, state of health or the size of the family. For example, where a Lifetime Health Cover loading does not exist, a single, healthy 20-year-old and a single, unwell 60-year-old will both pay the same premium for the same cover with the same fund. However, the cost of premiums for similar cover may vary between funds.

Private Health Insurance is different from trauma and disability insurance. These insurance's are 'risk rated' rather than community rated and generally offer lump-sum payments in the event of specific illness or loss. They are not a substitute for health insurance with a registered health fund.