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Health funds HCF, HBF in talks for merger

26 February 2018 - 9:24am

On February 19 it was announced that the two largest not-for-profit health funds in Australia, HBF and HCF, were in talks to complete a merger. This momentous agreement could change the country's health insurance landscape and fundamentally shift the market position of these two funds.

With that in mind, what are the details of the health fund merger and what exactly could it mean for health insurance customers?


This merger will improve the market position of both funds. This merger will improve the market position of both funds.

The details of the HCF, HBF merger

The proposed merger is in its early stages and must still be approved by the councils and boards of both health funds. If it is voted in by these committees, the merger will need further approval from a number of regulatory bodies, including the Australian Prudential Regulation Authority and the Australian Competition and Consumer Commission. 

In the event that the merger is approved HCF and HCF will hold roughly 18.4 per cent market share, as well as assets of $4 billion and 2.5 million members. The new entity will be the third largest health fund in Australia, after Medicare and Bupa. 

HBF will retain its iconic branding in Western Australia, as well as its branch network, while using additional resources to expand nationally. The proposed HBF, HCF merger may be finalised by mid 2018, at which point there will be an initial transitional period while the two funds are combined.

Large health funds have the advantage when it comes to keeping costs down, thanks to increased bargaining power.

Merger to deliver better values for customers

In a February 19 media release, Managing Director of HCF Sheena Jack said that delivering value to health fund members will be the number one priority of the new entity:

"The not-for-profit business model exists for its members, rather than shareholders and plays a vital role in our economy, not just in private health insurance but across many industries. The best interests of our combined membership would, as always, be our number one focus."

Large health funds have the advantage when it comes to keeping costs down, thanks to increased bargaining power and economies of scale. The size of the new entity will allow it to capitalise on these advantages, enabling reinvestment into the business, and the chance to deliver better value premiums to health fund members. 

Whatever happens with regards to this merger, it's heartening to see health funds taking measures to provide value for members. If you'd like to get better value out of your health insurance today - get in touch with a consultant here at HICA for expert advice.