The Government has apparently promised this morning that health insurance won’t cost Australian members any more after the sale of Medibank Private but the question I have for you is will Medibank Private policyholders get a look in in the proposed $4bn listing. It turns out that Medibank might not be the Government’s to sell!
A series of investigative media reports have said that members could be set for a windfall if the Government admits it has changed the rules for the insurer, so it could one day privatise it. But it has gotten all the way to the announcement that the insurer is for sale without discussing it.
And now the members of Medibank Private, who are part of a large petitioning group, are seeking legal advice on a potential court challenge to the sale of the health fund. Could you be eligible to be a part of it? Have you ever been a Medibank Private policy holder?
The organisers of a petition that calls on the federal government to recognise the ownership claims of Medibank Private policyholders have signalled would be prepared to take the government to the High Court to defend their rights.
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In a statement emailed to thousands of Medibank policyholders on 28 September, petition organisers have called on members to support a constitutional challenge to the government’s claim to full ownership of the health fund.
A petition running at Change.org is demanding that the Government recognise policy holder equity as was done in the demutualisation of NIC, NRMA and others. And this windfall could be as large as $30,000 according to some claims in the media.
Journalists from The New Daily uncovered the issue that the Fund officially recognised “members” as equity holders in the balance sheet of the business between 1993 and 1996. ”In December 1997 the government directed the Health Insurance Commission to transfer equity of the fund to a new government-owned company, known as Medibank Private Limited,” said The New Daily report.
“Without any explanation in the notes to the 1997 accounts, the term “members’ equity” was removed from the balance sheet by government accountants and replaced with a new concept known as “fund equity”.”
The amount that just disappeared from the balance sheet was, according to the company’s annual report, more than $350,000,000 in 1994.
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The Government had changed the legislation and accounting, rightly or wrongly we don’t know, to make themselves the owners of Medibank Private without paying out the declared equity holding members. This is likely to come back and bite them in coming weeks if deemed inappropriate by accountants and legislators.
The Change.org petition is called “Medibank Private Members must get shares in demutualisation”. It currently has just 1,754 signatures but with proper financial discovery of what the demutualisation could mean, this will no doubt get a lot larger.
“The government through Medibank Private have always called policy holders members, and the Medibank sale must recognise members per previous demutualisations of health fund NIB , NRMA Insurance etc etc. in both these demutualisations members/ policyholders received up to 6000 shares. Mr Abbott you will not get away with short changing Medibank Private members of up to $30,000.00 in possible benefits from their loyal membership to Medibank Private. please sign this petition and show Mr Abbott that members will not accept the sale without benefit to us loyal members.”
Previously we have published another article on this subject: http://www.startsatsixty.com.au/living/medibank-policyholders-could-make-money-from-the-sale