AUSTRALIA's largest private health insurer - Medibank Private - has again been awarded an A rating by international credit ratings company, Standard & Poor's, placing it in the enviable position as one of just two health insurance funds to carry this rating.
This healthy rating - coupled with numerous other factors - is why Medibank finds the latest comment by Standard & Poor's managing director, Ian Thompson, disappointing. Mr Thompson said at the launch today of the Australian Health Insurance Report, that private health insurers would need to tread carefully in the new operating environment to ensure they do not fall back "into the dire situation of poor operating results and declining reserves and memberships" of recent years.
He went on to predict that health insurance premiums would increase by 10 per cent next year. Medibank Private managing director, Mark Burrowes, rejected these claims as "bleak and unsound". "Medibank Private is very strong and getting stronger. We have had an enormously successful year building on a strong surplus last year.
The industry, supported by the Federal Government's 30 per cent rebate and Lifetime Health Insurance is enjoying unprecedented growth. "Medibank has not raised it retail product rates this year and expects little or no increase next year. Our key objective is to keep private health insurance affordable for our members."
Mr Burrowes says Medibank's high level of confidence is based on the enormous volume of new members it has acquired in recent months - allowing it to retain its position as the largest private health fund in Australia. By the end of last week, the number of people covered by Medibank Private had risen to 2,274,390. "Not only do we have high membership volumes, but the entrance of younger people into our fund has grown significantly and has dramatically improved our risk profile.
"To suggest that our premiums will increase, is absurd!"