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An article titled Govt to Weigh Medibank Private Sell-Off appeared in ABC Online News on 27 March 2006.

The following are some items that were mentioned:

• It is likely that Federal Cabinet is considering a recommendation to sell Medibank Private.
• ABC Radio’s AM believes that the Federal Government is set to sell Medibank Private now that a scoping study has been completed.
• Medibank Private is valued at an estimated $1 billion. And it is thought that interested bodies will be able to bid for ownership as opposed to a stock market float.
• Medibank Private controls 30% of the private health insurance market and is Australia’s largest health fund. Total revenue for 2005 was $2.8 billion and operating profit was $131 million.
• Professor Jeff Richardson, director of the Centre for Health Economics at Monash University, is not convinced of the economic argument for a sell-off. “As we are running surpluses at the moment, it is not exactly clear why we need to be raising revenue by selling off our assets. Remember, when you do sell off an asset, you may have more cash in your hand, but you don’t have the asset. So overall, there’s no particularly persuasive reason why you would want to change the form of your assets from an enterprise to cash.”
• Lindsay McMillan from the Multiple Sclerosis (MS) Society raises concerns for people with a chronic illness. “As we know from an Access Economics report, that 70 per cent of Australians with MS continue to have private health insurance, and the concern that we would have is, does this mean that for a group that is most vulnerable and relies heavily upon private health insurance, will the continuing cost of private health insurance increase and become a further burden,” he said.
• Health insurance premiums have jumped 40 per cent in the last six years, and the Australian Consumers Association argues that the sell-off of Medibank Private would put more pressure on premiums.
• The Government has argued in the past that privatisation could make the system more competitive.
• Professor Richardson says ownership does not determine premiums. “The prices are going up in health insurance because people are using more services and they’re more costly services, so costs are really being driven by technologies, it’s not being driven by the management expenses of the health fund. There is no evidence Medibank Private would be more efficient if sold off. Their expenses are comparable with the expenses of other health funds,” he said.

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