Members-only treatment in Medibank float
The Federal Government is considering a proposal to give Medibank Private’s four million policyholders incentives to purchase shares in the insurer when it is floated on the market.
The Australian Financial Review has reported that Finance Minister Mathias Cormann has approved plans for the float to include a special offer to policyholders separate from the general public offer and an offer to broker firms.
The share offer will go public at the end of this month, when prospective investors will be able to register their interest, Senator Cormann told ABC radio.
“By the end of October, people will be able to receive the Medibank Private share offer prospectus,” he said. “That prospectus will include all of the specific detail about the structure of the sale, including the issues relating to Medibank customers.”
The timing means the company could be listed on the Australian Securities Exchange by the end of the year.
The AMA has warned that the sell-off could result in higher health insurance premiums.
But Senator Cormann was dismissive of these concerns.
“The ownership structure of Medibank Private is completely irrelevant when it comes to the setting of premiums,” the Minister told ABC radio’s PM program. “That is because, number one, Medibank Private will continue to operate in a highly competitive market and will have to be mindful of, obviously, competition from other private health funds when it sets pricing, and number two, premium setting is highly regulated in Australia and, of course, there is a process there which ensures that premium increases are appropriate and that process will not change.”
The Government approved an average annual premium increase of 6.2 per cent on 1 April, but analysis by financial services firm Canstar has found that in some states the average increase has been much higher.
Canstar reported that in New South Wales and Victoria average premiums for hospital cover have risen by 9.2 per cent, by 8.84 per cent in Queensland and 8.42 per cent in the Northern Territory.