Voters sceptical of Medibank privatisation
Voters share the AMA’s lack of enthusiasm for the privatisation of Medibank Private, with almost half voicing outright opposition to the idea, according to a survey by pollster Essential.
In a result that suggests the Abbott Government faces a tough task if it wants to win over voters to the proposed privatisation of the nation’s largest health fund, the poll of 1000 voters found just 22 per cent supported the move, while 43 per cent objected to it, with the remaining 35 per cent uncommitted.
According to the Essential poll, even Coalition voters were unconvinced – fewer than 33 per cent thought it was a good idea.
The results echo the AMA’s caution over the proposal.
Ever since sale legislation was first introduced in 2006, the Association has voiced concerns that it could lead to higher premiums by reducing competition in the private health insurance market, saddling the eventual buyer with heavy debt servicing obligations and possibly exposing the health fund to offshore financial risk.
The Federal Government has begun work the proposed sale, issuing a call for tenders from business and accounting experts to undertake a scoping study, to be completed by the end of February.
The Government has set out its objectives for the sale, including that it contribute to a competitive and viable private health insurance sector, that services standards for policyholders be maintained, the employees are treated fairly, that any residual risk and liabilities for the Commonwealth be minimised, and that the sale price be maximised.
Health Minister Peter Dutton said on Sky television that the Government “really doesn’t have a business [being] in this [the private health insurance market]”.
Seeking to allay concerns the privatisation would lead to more costly health insurance, Mr Dutton thought it would actually achieve the opposite.
“I think with the sale we’ll see more competition,” he said. “I think Medibank Private, particularly given the presence that it has in the market, has an opportunity to introduce more reform efficiency without the monkey of government on its back.
“And I think, ultimately, that will have a positive impact on the way in which premiums are priced and competition operates in the private health insurance market.”
But AMA President Dr Steve Hambleton remained cautious about the proposed sale.
“Our main concern was that there may be potential for decreased competition in this industry. If that’s the case, that will drive up premiums for everyone,” Dr Hambleton said, adding that this is one of the issues that should be addressed by the scoping study.
“We want to understand about whether competition will be decreased, whether there is a risk of premiums, because that’ll affect us all,” he said. “It’s a very fine balance between the public and private sector in this country, and we know that you don’t have the capacity in public hospitals if there’s a major shift away from the private system.”
Dr Hambleton said two possible ways of selling off Medibank Private were to allow acquisition by another domestic health fund, or by an offshore entity, and both outcomes carried with them concerns.
“If it’s a trade sale to one of the other players then that decreases the number of players [and] if there are international sales, that may bring in some further risk. So we’d like to see the results of the scoping study.”
The Medibank Private Sales Act would have to be amended to remove a 15 per cent ownership limit if there was to be a trade sale, while any purchase by an offshore entity would like be scrutinised by the Foreign Investment Review Board