01.Medibank fire sale
The government insists that premiums will not increase as a result of the Medibank sale. Minister for Finance, Mathias Cormann, said Medibank will still need to compete against the 34 other health funds and comply with regulatory requirements in premium changes.
In announcing Medibank will be sold before July 2015, Cormann said there is an inherent conflict where the government is both regulator and owner of the largest participant in the market. Medibank paid about $450 million in dividends to the government in 2012 and 2013 but the Australian Medical Association told the ABC that "a new owner of Medibank will need a return on equity greater than the government is currently receiving".
Medibank Private’s brands - Medibank and AHM - have a 30% market share, the largest of all the health funds, closely followed by BUPA. The government regulator approved an average 6.5% increase in Medibank premiums on 1 April, higher than the industry average of 6.2%.
With premiums for all funds rising next Tuesday, now is the time to think about switching health funds