The sale of Medibank Private will see the biggest health insurance provider in Australia floated on the Australian stock market as early as November.
Finance Minister Mathias Cormann announced on October 20 that the privatisation of Medibank will see the government-owned insurance company enter the top 100 companies on the ASX.
The sale is projected to raise between $4.3 billion and $5.5 billion for the government, with shares in Australia's biggest health insurer expected to be sold for between $1.55 and $2 each.
"A price cap for retail investors means that Australian residents who choose to apply for shares will not pay any more than $2 per share, even if the final price is set above the indicative range," Mr Cormann explained, in a report by The Guardian.
How does this affect my health insurance?
In Medibank's prospectus, published on October 20, the insurer announced that there will be no change to the policies or insurance coverage of their customers.
"We have been dedicated to looking after the health of our members for over 38 years and will continue striving to keep healthcare affordable and to improve the health of all Australians. With regards to your health insurance or any other service you have from Medibank or ahm or our other brands, there is no change," Medibank explained.
How does this benefit me as a policyholder?
While the level of coverage a person receives from their Medibank heath insurance package won't change, Medibank and ahm policyholders could find it easier to invest in the flotation.
The new proposal stated that:
- Pre-registered policy holders could be eligible to apply for shares up to 30 per cent higher than the general public offering.
- Policy holders who did not pre-register could be eligible to apply for shares up to 15 per cent higher than general public offering.
- Australian residents who have pre-registered their interest can be allocated shares up to 15 per cent higher than non-registered applicants.
What do I do next?
Medibank said that customers will not have to do anything to ensure their health insurance policy continues to stay the same.
However, the government said the reasons for the sale is to increase competition for consumers when choosing their insurance provider. Those intending to look into the market further can compare health insurance packages online.
A health insurance broker has the means to work for you. For help choosing a competitive health insurance package, call HICA on 1300 44 22 01.