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Medibank Private: sold!



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JULIA GILLARD M.P.

Shadow Minister for Health Manager of Opposition Business 27 March 2006

MEDIBANK PRIVATE - SOLD!

According to media reports today the Howard Government will announce the sale of Medibank Private tomorrow.

Having completed the second scoping study on the sale of the Government owned private health insurer, the Finance Minister has decided it will go ahead. As revealed by Labor, the Health Minister has played no role in the decision and the impact on Medibank’s 2 million plus members has clearly not been the primary consideration.

The Health Minister, Tony Abbott has allowed private health insurance premiums to increase by more than 40 per cent since 1999, overwhelming the dollar value of the 30 per cent rebate.

Tony Abbott has failed to make Medibank Private a market leader in providing quality, value for money health insurance policies despite being publicly owned and controlling 30 per cent of the market (44 per cent in some States).

There is no evidence to suggest that the privatisation of Medibank Private will deliver better outcomes to consumers.

According to the Private Health Insurance Ombudsman, Medibank Private is paying out less in benefits, as a percentage of total contributions, from 91.5 in 2003-04 to 88.4 per cent in 2004-05 despite an increase in membership.

Medibank’s management expenses ratio has also increased from the previous financial year, from 8.7 per cent to 9.2 per cent.

Hospital agreements are crucial to ensuring that members have access to no or known gap services. However, again, Medibank Private appears to be failing its members with a drop in the number of private hospitals it has agreements with in NSW, ACT, WA, SA, Queensland and Tasmania.

The cost of medical technologies has been recognised as a key driver in increasing costs for the funds and causing gaps. But the Health Minister has failed to take any action to improve the processes by which new technologies are assessed and adopted for use in the health care system as recommended by the Productivity Commission in August 2005.

The Private Health Insurance industry has distanced itself from claims made by Senator Minchin that the sale would lead to reduced premiums.

Labor is opposed to the sale of Medibank Private. This is a financially driven asset sale and will not result in better efficiency for consumers.

27 MARCH 2006

CONTACT: Kimberley Gardiner 0401 533 002