Private health insurance provider nib is looking to prevent policy holders from dropping their cover, after the federal government passed legislation to means test the rebate currently offered to Australians.
Up to 5,000 nib customers are expected to drop their cover altogether, while another 19,600 are likely to downgrade or change their policy.
While the private health insurance industry was anticipating a significant shift amongst its policy holders, nib managing director Mark Fitzgibbon stated that the provider will be looking to increase its advertising campaigns to help retain customers.
"We'll spend a fair bit more this year on advertising and marketing compared to previous years," he said yesterday (February 20).
Mr Fitzgibbon also believes that the extra spending will create value in the business.
"Our performance in recent years illustrates that point and we want to make up for the anticipated loss of policyholders caused by these rebate issues."
The health insurer has allocated an additional $7 million for advertising and marketing in the second half of this financial year.
Nib is also looking to 2013, where another 20,000 customers could downgrade their private health insurance policy.