Last Updated on 23 October 2020

Guide to Private Health Insurance in New South Wales

Throughout Australia, nearly half  of the population, have private health insurance to provide coverage for hospital service and 55 percent of the population has general coverage to pay for things like dental treatment, optical services, and routine care. Nationwide, there are over 30 major insurers vying for business among the 12.6 million total people in Australia covered by some kind of private health insurance policy.

Although many insurers operate throughout all of Australia, there are some significant differences in policies and coverages among the states. It is important to understand what your own state’s insurance market is like, and to be prepared to learn about other markets if you are moving to a different location. Those in New South Wales, for example, should know the major insurers in the area as well as the differences in average premiums by state and the variations in coverage options.

Who are the biggest insurers in New South Wales?

Within New South Wales, the largest insurance companies include:

  • HCF, which has 20.2 percent of the market share.
  • BUPA, which has 25.1 percent of the market share.
  • Medibank, which has a 24.5 percent market share.
  • NIB, which has 13.9 percent of the market.

While some insurers do not have as large of the market within New South Wales, they do focus their business almost exclusively on individuals within this state.

Choosing larger insurance companies can sometimes provide benefits to consumers because the insurer may have a larger network of providers in connection with the insurer’s more substantial size and negotiating leverage. However, bigger is not always better. You should shop around among both large and small insurance providers to determine which company’s offerings are best for your specific needs.

How does market concentration vary from state to state?

More insurers and broader competition in the market can help to hold down premiums. New South Wales is the most heavily contested market. BUPA and Medibank Private account for more than 45 percent of policies and most of the insured have policies with the four largest heath funds in NSW.

How does the cost of health insurance in New South Wales compare?

There are significant variations among insurance policy costs as you move from one state to another.

In New South Wales, the average premiums for family cover in 2015 was $4178 with obstetrics and $3834 without it.

Obviously you cannot move states simply to alter your average health insurance premium costs or to get a better value for your premium dollars. However, you can shop around with providers within New South Wales in order to find the best local deal.

How does ambulance cover vary?

Health insurers offer different levels of ambulance cover depending upon the state where you live. Bupa, for example, explains that NSW residents who have a concession card in New South Wals or Australian Capital Territory, or who have eligible hospital coverage with a private insurer, are going to be covered for ambulance service within NSW as well as within all states except for South Australia and Queensland. It is important to understand when your provider will pay for ambulance services.

How profitable are insurers in New South Wales?

For-profit insurers aim to make money off of policy premiums and to pay out less in claims than they take in. However, profit margins can vary significantly for insurers from state to state. In New South Wales, for example, insurers had a gross profit margin of 9.1 percent in New South Wales, while they had a 21 percent profit margin for general treatments. In Northern Territory, insurers had the highest gross margins for general treatment, with a profit margin of 30.5 percent. Northern Territory insurers also had a profit margin of 26 percent for hospital treatment.

Insurers should not charge premiums that are significantly higher than the cost of claims, because this can result in consumers overpaying for policies. A very substantial profit margin can also mean insurers are denying too many claims and not paying out as much as they should. When you shop for coverage, be sure to check whether the insurer has a good reputation for paying claims made by policyholders.

You want your insurance costs to be affordable while still providing the coverage you need. Shop carefully to determine the best deal within New South Wales.

Disclaimer: The above information is correct and current at the time of publication.


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