Not for profit health insurance vs for profit: what it means for your health cover
When choosing a private health insurer, have you ever stopped to consider who the fund is ultimately working for? It sounds like a simple question, but the answer can shape your entire experience as a member. Choosing private health cover in Australia can feel overwhelming — there are different fund types, ownership models, and levels of cover to research.
Not all health insurers operate the same way. Some exist to generate returns for shareholders - these are for-profit. Others are purely for their members - these are not for profit health insurance funds. That difference matters more than most people realise.
Understanding the Types of Private Health Insurance Funds in Australia
What is Private Health Insurance?
Private health insurance supplements Medicare, covering hospital stays, surgeries, or extras such as dental, optical, and physiotherapy services. It can provide more choice in specialists and potentially shorter public hospital wait times for elective procedures.
Around 45% of Australians hold some form of hospital cover, according to recent APRA data, often to avoid the Medicare Levy Surcharge or the Lifetime Health Cover loading. Policies can vary a lot, so what suits one person might not be the best for someone else, depending on their unique situation and needs.
Open vs restricted health funds
Not all health funds are accessible to everyone. Open funds accept any Australian resident who meets the eligibility requirements, while restricted funds are limited to specific industries, like teachers, doctors, transport workers, or defence personnel. Both can be for-profit or not-for-profit. The open or restricted structure determines who can join, not the fund's ownership or management.
For profit vs not for profit health insurance: What's the difference?
How for profit health insurers operate
Many of Australia's largest health insurers are for-profit companies owned by shareholders or parent firms, with the goal of making financial returns. Profits can be paid out as dividends, and decisions are made to balance member benefits and investor interests.
This simple commercial model involves stakeholders: investors and the insured.
How not for profit health insurance funds operate
Not for profit health insurance funds prioritise members over external shareholders. Surpluses are reinvested to benefit members, improving services and community initiatives. Management focuses on member well-being and sustainability, making the fund's success directly benefit members.
What are the general benefits of a not for profit health insurance fund?
Reinvestment Into member benefits
When a not for profit fund performs well, no shareholders are waiting for a dividend. That surplus stays within the fund. Depending on the fund's performance and board decisions, this may support improved services, expanded health programs, or premium stability over time. While no fund can promise specific results, the lack of external shareholder obligations means more of the fund's resources can go to the people it was created to serve — its members.
Member-focused governance
In a not for profit fund, the main question is what benefits members most. Without competing investor interests, the focus is on shared interests rather than transactions. Cover, services, and reinvestment are guided by members' needs, making governance more directly connected to those it serves.
Investment in community health
As a not for profit health insurance fund with a focus on rural areas, Westfund invests in community health through prevention, improving regional access, and local partnerships. For rural Australians, this approach offers vital health support, emphasising that health is a community, not just a personal outcome.
Member focused, not shareholders
Not for profit health insurance funds are free from investor pressure, can prioritise long-term goals like member support, and community health projects that build value over time.
The true strength of the not for profit health insurance model really shines through in how it reuses any extra funds, showcasing its unique benefits.
How Westfund reinvests in members
Understanding the not for profit health fund model in theory is one thing. Seeing how it plays out in practice is another.
Westfund is an open, not for profit health insurance, member-owned health fund based in regional New South Wales. As a fund with genuine community roots, Westfund reinvests surplus funds into programs and support designed to deliver real, everyday benefits to members and the broader communities they call home.
The initiatives below are not add-ons or marketing gestures — they are direct expressions of what it means to operate a health fund that answers to its members, not to shareholders.
Give Backs
Rather than redirecting surplus to shareholders, Westfund has periodically provided financial give-backs directly to eligible members.
The 2026 Giveback for Good Health initiative continues this tradition.
Mobile Skin Screening Clinic
Access to preventive health services shouldn't depend on your postcode. Westfund's Mobile Skin Screening Clinic brings general skin health checks directly to communities — including regional areas where specialist services can be harder to access.
Learn more about the Mobile Skin Screening Clinic here.
National Disaster Suspension
Life doesn't pause during a natural disaster — and neither should member support. Westfund's National Disaster Suspension option recognises that members affected by floods, bushfires, or other declared disasters may need temporary financial relief without losing their cover.
Eligible members may be able to suspend their membership during these particularly challenging times. It is a practical, compassionate policy that reflects Westfund's community-first values. Terms, conditions, and eligibility criteria apply. Learn more about the Westfund National Disaster Suspension here.
Community Grants Program
Westfund's Community Grants Program is an investment in the health and well-being of the regions and communities where members live and work. Through this program, local organisations and initiatives can access funding to support community health outcomes.
It directly reflects the not for profit health fund philosophy, surplus reinvested not only in individual members but also in the wider social landscape that influences health and quality of life.
Learn more about the Westfund Community Grants Program here.
Member Support Services
Navigating the health system can be confusing, and that is where genuine member support makes a real difference. Westfund provides personalised assistance to help members understand their cover, manage claims, and access available services.
Whether it is a question about an upcoming procedure or help with a claim, members have access to real people who are there to assist — not to redirect them through an endless automated system.
Westfund’s Contact Centres are all based in Australia, located in Lithgow, Penrith and Maroochydore, and are supported by 12 Care Centres across regional New South Wales and Queensland
Health and Wellbeing Programs
Health cover is at its best when it supports members before they need hospital treatment, not just after. Westfund's Health and Wellbeing Programs are designed to do exactly that — providing members with access to initiatives focused on overall wellbeing, healthy lifestyle choices, and preventive care.
Health Co-Op
The Westfund Health Co-Op is a practical, member-centred initiative that gives members access to a range of health and wellness services and products — usually at reduced costs.
Visit the Westfund Health Co-Op here.
Are you considering not for profit private health insurance?
If you’re considering switching, it may be worth reflecting on whether your current fund's priorities truly meet with your own. To explore what Westfund's member-owned approach could mean for you, visit westfund.com.au or call Westfund on 1300 937 838
Sources:
- APRA — Quarterly Private Health Insurance Statistics, 2024. apra.gov.au
- Australian Government — Types of health insurance funds, privatehealth.gov.au
- Private Healthcare Australia — About Private Health Insurance, privatehealth.org.au
- APRA — Annual Private Health Insurance Fund Statistics, apra.gov.au
- ACCC — Private Health Insurance Report, accc.gov.au
- Australian Institute of Health and Welfare (AIHW) — Health expenditure Australia, aihw.gov.au
This article provides general information only and does not take into account individual objectives, financial situations, or health needs. Eligibility, terms and conditions apply to Westfund membership, products, and programs. For more information, please visit Home | Westfund Health Insurance.