Nearly 900,000 fewer Australians hold Gold private health insurance than six years ago, according to data compiled for a new HCF white paper on mental health care access.
The proportion of insured Australians with Gold cover – the only hospital tier providing unrestricted psychiatric benefits – fell from approximately 40% in late 2019 to 28% in late 2025, independent research by consultancy Nous Group found.
HCF projects that Gold membership could fall from 3.6 million to 2.4 million over the next decade if current trends continue.
The white paper, A Shared Reform Agenda: Reimagining Mental Health Care, describes what it calls a “Gold spiral”: as healthier members leave the tier, psychiatric claims concentrate among fewer policyholders, pushing premiums higher and prompting further departures.
Private hospitals account for almost 30% of overnight mental health admissions and more than 90% of same-day mental health admissions nationally, according to Australian Institute of Health and Welfare (AIHW) data cited in the white paper. Access to much of this care depends on Gold cover.
Private health funds paid approximately $749 million for hospital-based mental health treatment in 2024-25, roughly 4% of total benefits. The average benefit per mental health admission rose 18% over five years, from $3,386 in FY20 to $3,980 in FY25, reflecting increasing patient complexity and longer treatment.
HCF said mental health now accounts for 90% of its Gold-tier claims, with the average overnight private mental health benefit passing $15,500 in 2025.
The cost barrier extends beyond insurance. The National Mental Health Commission’s Report Card 2025 found the proportion of Australians aged 15 and over who cited cost as a reason for not seeing a mental health professional rose from 12% in 2020-21 to 20% in 2024-25. Roundtable participants cited typical specialist out-of-pocket costs of approximately $500 to $600 per consultation.
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The white paper followed a national roundtable in Canberra involving more than 40 leaders from across the mental health sector. Participants identified five priorities for further development:
HCF CEO and managing director Lorraine Thomas said the white paper aims to move the conversation beyond identifying problems. “There’s already a lot of good work happening across Australia’s mental health system, but too many people still struggle to access the care they need. This is ultimately about people, not systems. The real measure of success is whether we improve access, continuity of care and outcomes for Australians,” Thomas said.
Dr Rachel David, chief executive of Private Healthcare Australia, told the roundtable the sector needs to find alternatives to hospital-dependent treatment. “We need to find a pathway to a no-gap model of care for mental illness that does not depend on hospital admissions,” Dr David said.
Bupa said in July 2026 that it supports measures to expand mental health care outside hospital settings.
The federal government’s Department of Health, Disability and Ageing released its first private health reform consultation paper in July 2026, listing mental health care among four priority areas. Insurers are expected to lodge 2027 premium applications in November without knowing the outcome of that process.
Christine Gee AM, director of Ramsay Mental Health Australia and president of the Australian Private Hospitals Association (APHA), said the current system forces people to wait until crisis before they can access treatment. “There is a significant gap within the current private system model, where people – particularly those experiencing moderate to severe mental illness – face systemic barriers to accessing timely care, effectively delaying treatment until a clinical crisis occurs. Even then access to care is not guaranteed,” Gee said.
Adjunct professor Karen Price, former president of the Royal Australian College of General Practitioners and chair of the HCF Research Foundation, said the focus needs to shift beyond acute treatment. “We are missing the concept of ‘deep care’. Too often, we patch people up and put them back into the system, rather than helping them understand how to manage their condition and where to seek support before they reach crisis,” Price said.
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The cover gaps created by Gold downgrades are already visible. Brett Heffernan, chief executive of the Australian Private Hospitals Association, told ABC News in February 2026 that nearly 70% of Australians with private hospital cover now have exclusions or restrictions built into their policies.
For brokers, clients who move from Gold to lower tiers may lose cover for joint replacements, cataract surgery, pregnancy and birth, and unrestricted psychiatric care. The white paper notes that current product tiering concentrates higher-cost services in Gold, limiting flexibility to support different patterns of care.
HCF noted that the five priorities are areas for further development, not finalised policy proposals. Each requires additional evidence, consultation, and cost-benefit assessment. But the direction across the sector is clear: the potential expansion of non-hospital mental health treatments under private cover, changes to risk equalisation, and continued pressure on Gold-tier affordability all point to a shifting product landscape.
The Australian Prudential Regulation Authority’s (APRA) June 2026 quarterly data showed 12.8 million Australians still held hospital cover – 45.8% of the population – but the composition of that cover continues to shift away from comprehensive tiers.
