What are preferred health care providers?

What are preferred providers?

Preferred providers are service providers with which a health fund has a special relationship or arrangement, and that you're encouraged to use. In some cases, this could even be a dental or optical centre that is owned and run by your health fund.

You can often get discounted treatment or agreed rates if you access treatment from a health care provider featured on your fund’s list of participating providers. You may also be able to access a higher rebate from your fund under your extras policy, allowing you to save money on the cost of treatment for a wide range of conditions.

Preferred providers for extras cover

Most health funds have a network of out-of-hospital medical providers they have agreements with. This could be an agreement with an individual provider or a particular chain - for example Pacific Smiles partners with nib at every location. Many health funds also run their own practices - for example Bupa, HCF and Teachers Health all have dentists and optometrists under their own brand.

Some of the most common preferred provider types include:

No gap dental from a preferred provider

One of the most common perks you'll see advertised by health funds is no-gap dental. The way this tends to work is that a visit to a partners dentist will be fully covered by your extras cover. Generally it will only cover general checkups, so you may still have an out-of-pocket cost for things like x-rays of more complex work.

Of course, no-gap dental isn't free - you pay for it through your premiums. But if no-gap dental gets you going to the dentist more often, then it's probably worth it!

Where to find your fund's preferred extras providers

If your health fund has relationships with participating providers, you will usually be able to search for your nearest supported providers through the fund's website. However, make sure you're aware that your fund may label its preferred providers by other names, such as participating providers, members' choice providers or members' first providers.

Using preferred providers to save

"I use the ahm approved dentist to get 2 free appts per year. It's worth over $200 so it's a fantastic benefit that my husband and I use every year."

Sarah Megginson

Personal finance expert + media spokesperson

Preferred providers for hospital cover

There are also preferred providers for hospital cover, although they're typically called 'agreement hospitals'. The idea is the same as extras - by getting treated at an agreement hospital, there should be a smaller out-of-pocket cost to pay.

Just remember, hospital out-of-pocket costs can be complex, with many more factors that could increase or decease your out-of-pocket costs. The best way to manage, and ideally reduce, the gap is to call your health fund before you book any treatment. You'll want their advice on preferred hospitals and a written statement of what they'll cover you for.

Which health fund has the most agreement hospitals?

Each health fund makes their own agreements with individual private hospitals. There are around 650 private hospital across Australia, but the average number of agreement hospitals for each fund is around 500, and there's a lot of variation between funds.

The table below shows the number of agreement hospitals for each health fund as of June 2024. A fund with a higher number is more likely to have an agreement hospital near you. If you're interested in a particular hospital, check out the government's list of agreement hospitals.

Pros and cons of preferred providers

Preferred providers aren't perfect, especially for extras. Here are a few of the quick pros and cons to consider before making a decision.

Criticism of preferred provider schemes

There's a decent amount of good criticism of preferred provider schemes from some parts of the medical community. This article from Tooth Dental in Queensland outlines why it isn't a preferred provider, arguing that the schemes are just about keeping more money in the pockets of health funds, rather than offering better care. The argument goes that when financial incentives are prioritised, the importance of your health and wellbeing drops.

It's a decent enough argument, though I suspect there are dentists, optometrists and more who are still completely committed to caring for their patients despite being part of a preferred provider program. Your choice of provider is one you'll have to make yourself, in the end.

Frequently asked questions

• Should I use a preferred provider?

  Using a preferred provider is generally a good idea, at least financially. When using your extras, you'll generally receive a higher benefit from a preferred provider than a regular provider. When using hospital insurance, you will generally reduce your out-of-pocket expenses with a preferred hospital or GP.

• Will a preferred provider offer better service?

  No, proferred providers will nott neccessarily give you better service. In fact, some providers - like Tooth Dental in Queensland - say that preferred provide programs mean that providers get paid less, while patients are given less choice.

• Do all funds have preferred providers?

  Most funds have a list of preferred providers, although some funds have longer lists than others. Some funds also offer heavier discounts with their preferred providers than others - make sure you check with your health fund.

Written by

Tim Bennett

Insurance expert

A seasoned journalist with over 10 years of experience in news, politics and finance reporting, Tim has previously held roles at the ABC, SBS and Fairfax Media. Tim’s expert insights have been quoted in The Australian, The Daily Telegraph, The Courier Mail and more. He regularly appears on TV and radio, and has been interviewed on 7 News, Sunrise, SBS News, ABC Local, 3AW and 5AA. Tim is passionate about simplifying complex insurance topics for Australian consumers. He holds a Bachelor of Arts (Politics) from Macquarie University and a Tier 1 General Insurance (General Advice) certification, which meets the requirements of ASIC Regulatory Guide 146 (RG146). If you’re interested in a media interview with Tim, please reach out to our PR team at aupr@finder.com. See full bio

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