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Govt looks to sell health insurer
2 May 2002
The Federal Government will investigate selling the publicly-owned health insurer Medibank Private. The nation's largest health insurer, with a 27.4 per cent market share, has reportedly lost more than $50 million in recent months.
The move will be announced in this month's Budget. The health fund is expected to sell for $500 million to $1 billion, but the sale price is likely to be held down due to its financial situation and difficulties in the insurance industry. The Federal Opposition has made it clear that it will oppose any sell-off, as Medibank plays a crucial role in influencing health insurance.
The profitability of health funds dived after memberships surged due to Government health cover reforms introduced two years ago. Medibank Private was hit hard by the impact of the September 11th terrorist attacks on its investments and because its low premiums didn't cover the increase in private care costs. The fund applied for premium increases of 13 per cent earlier this year, but this was knocked back to 8.9 per cent.
Sydney Morning Herald, 2/05/2002.
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