The health insurer for the La Trobe Alumni Health Plan is HCF. HCF is Australia’s largest not-for-profit Health Fund. HCF has been established over 75 years. HCF is the 3rd largest Fund in Australia (out of 38 in all). HCF covers 1,067,624 Australians. HCF has financial reserves exceeding Government statutory requirements.

HCF Performance - 2007-8 Year Group operating net profit for was $37.3 million after tax and donation to the HCF Health and Medical Research Foundation. Record health fund membership of 1,067,624, which is 57,000 more than last year. National industry share increased from 9.6% to 9.8%. Higher than average return to members – 90 cents in the dollar compared to the industry average of 85 cents. HCF’s management expense ratio of 7.9% is the lowest reported of any major fund and more than 25% below the industry average of 10.8%. Member satisfaction stands at 96%. Total health benefits paid were $973 million. Claims for hospital care increased by 11%. Charge agreements negotiated with 19,400 hospital, doctors and ancillary health care providers in 2008 – an increase of 18% on 2007. HCF donated $5 million to the HCF Health and Medical Research Foundation, which currently has $2.7 million in approved research projects underway. Not-For-Profit vs. For-Profit – A brief explanation All Health Funds need to make a profit or surplus.  They need to do this to build their reserves and provide security for members by preparing for higher claiming levels in the future.  For profit Health Funds also need to pay dividends to shareholders. Not-for-profit Health Funds tend to be mutual organisations – usually owned by the members and run by members through an elected Board of Directors.  These Funds do make surpluses when required – but don’t have shareholders to pay and don’t pay tax. Not-for-profit Funds generally aim to generate enough income to cover the cost of members’ claims, run the fund and meet the financial requirements of the Private Health Insurance Administration Council (PHIAC), which is the regulator for all health funds in Australia.  So instead of paying the profit to shareholders as dividends, it’s kept by the Fund for the benefit of members. Shareholder based ‘for profit’ health funds will usually distribute profit in the form of dividends to shareholders.  To pay dividends to their shareholders, they must make profits above and beyond the cost of claims, running their business and the statutory requirements of the regulator.  For-profit companies also have the additional cost of paying income tax on their profits.  The recommended insurer for the La Trobe Alumni Health Plan is HCF – Australia’s largest mutual, not-for-profit health insurer.