Australia’s health confidence disconnect is a huge opportunity for health insurers

Australians are confident about their health.

According to Healthylife’s Living Healthy Report 2026, 91% of Australians believe they can look after their own health. The average Health Confidence Score is 75 out of 100. Yet only 75% say they live a healthy lifestyle, and only 76% say they follow recommended health guidelines.

There is a clear gap between confidence and reality.

Healthylife calls this the “health confidence disconnect”. I think health insurers should see it differently. The gap between confidence and behaviour is not simply a challenge for the health system, it’s one of the biggest opportunities facing private health insurance.

Because if Australians increasingly believe their health is their responsibility, they’ll be looking for partners who can help them succeed.

People know what to do. They struggle to do it.

This was the finding that jumped out at me.

Australians know they should exercise more, eat better, sleep more and move more. We have more health information than at any point in history, yet chronic disease continues to rise.

This isn’t primarily an information problem. It’s a behaviour change problem.

The most innovative health insurers have recognised this. They’re moving beyond education and into prevention, coaching, virtual care and new models of care designed to help members make healthier choices and sustain them over time. The question is no longer how to pay claims more efficiently. Increasingly, it’s how to reduce the need for claims in the first place.

Our 2025 PHI Innovation Report found this shift occurring across the sector.

Medibank has doubled enrolments in prevention programs while expanding home-based care, virtual health and chronic disease programs at national scale. HCF has invested heavily in cardiac screening, joint pain management and hospital-at-home models. Bupa is building integrated medical centres and mental health clinics that intervene earlier and help members stay healthier for longer. nib is expanding telehealth, prevention and home-based care through Midnight Health and Honeysuckle Health.

The common thread is clear. The leaders are no longer asking, “How do we pay claims more efficiently?”, but, “How do we help members stay healthy in the first place?”

Environment matters more than willpower

The report also highlights something many of us instinctively know but rarely acknowledge. That our health is shaped by where we live, work, shop and socialise. Australians overwhelmingly believe their environments support healthy living, yet we continue to buy almost twice as many discretionary foods as vegetables. Workplaces were rated the least supportive environment for healthy living, and nearly half of Australians report multiple sleep problems.

Health is not simply a product of motivation. It’s a product of environment.

The insurers leading innovation understand this.

Bupa is investing in integrated care models that combine GPs, specialists and allied health. HBF is expanding its dental and physio networks. Medibank is increasingly shifting care into homes and communities through Amplar Health, while HCF’s Treatment at Home program has already avoided tens of thousands of hospital bed days.

These are not traditional insurance plays. They are attempts to shape the environments in which healthier choices become easier choices.

That is a fundamentally different proposition.

Trust may become the industry’s most important asset

Health professionals remain Australia’s most trusted source of health information, but younger Australians are increasingly turning to Google, social media and online communities first. Consumers are overwhelmed with information. They want guidance that is personalised, accessible and actionable.

In our PHI FACTORS™ framework, Consumer Trust & Expectations is one of the seven forces reshaping private health insurance. Trust is no longer earned through marketing campaigns or brand awareness. It is earned through experience.

The funds leading the sector are investing heavily in transparency, digital experiences and member value.

HCF now leads the industry in trust and member satisfaction through affordability and transparency. Medibank has embedded digital and AI capabilities that give members more control and visibility. Bupa is using free telehealth and connected care to make healthcare easier to access.

The organisations that become trusted guides in people’s health journeys will create an advantage that is difficult to replicate.

Affordability is now a health issue

The report also highlights growing concerns about affordability. Australians are relatively optimistic about accessing healthcare. They’re much less optimistic about affording it. Specialists, dental services and community care all rated poorly on affordability. This matters because affordability isn’t just about premiums. It’s about whether people can afford healthy food. Whether they can access allied health. Whether they seek help early enough to avoid something becoming more serious.

The most innovative insurers are responding by redesigning care itself.

Medibank has expanded No Gap surgery and home-based care. HCF now delivers 97% of in-hospital services with No Gap or Known Gap arrangements. Bupa is shifting care into medical centres and telehealth. nib is experimenting with new contracting models and hospital alternatives.

Affordability is increasingly being addressed through smarter care models, not simply premium restraint.

From payer to partner

The most important insight from the Healthylife report isn’t that Australians are overconfident. It’s that they want to be healthy. They believe they are capable of improving their health, but they need support turning good intentions into sustainable behaviours.

The insurers leading the sector have recognised this.

Our 2025 PHI Innovation Report found that the industry is shifting from fragmented innovation to system-level transformation. Prevention is scaling. Virtual care is becoming mainstream. Home-based care is reducing hospital dependence. Trust is being rebuilt through transparency and value. Innovation is becoming part of core business, not a side project.

The health confidence disconnect is real. But so is the opportunity. The funds that thrive over the next decade won’t simply be those that process claims more efficiently or negotiate better hospital contracts. They will be the organisations that help Australians live healthier lives.

Increasingly, many of them are already trying to become exactly that.