Labor has no plans to sell Medibank: Wong

SYDNEY (AAP) - May 25 - The Labor government has no plan to sell the publicly-owned health provider Medibank Private, Finance Minister Penny Wong has told a Senate hearing.
Liberal senator Mathias Cormann, whose party would sell Medibank if elected, on Wednesday quizzed the minister on whether the government planned to sell it in the next four years.
"Our government has no such plans," Senator Wong replied, adding that Senator Cormann had asked the same question at the last Senate estimates.
Senator Cormann said the health minister at that time had mooted such a proposal.
He asked Medibank's chief financial officer Michael Sammells several questions on the $300 million special dividend Medibank Private is to pay the government, an issue that came up during last year's election.
Mr Sammells said the special dividend would be paid in June, on top of the regular dividend it paid for the 2009/10 financial year of $81 million, from an after-tax profit of $260 million.
He would not say what the dividend would be for 2010/11.
"Medibank has a really strong balance sheet and after paying routine dividends and after paying the special dividend of $300 million," he told the hearing.
"Medibank remains in a strong and sound capital position. Capital is sufficiently in excess of the prudential minimum that provides security to future benefits."
He said Medibank has capital reserves of $2-$2.2 billion.
In regards to the government's proposed means testing of the health fund rebate, Mr Sammells said that Medibank had undertaken internal modelling in the past six weeks on its likely impact on membership, but added the results were "fraught with difficulty".
For example, membership data of its 3.7 million members did not include income levels.
"Our best educated guess to ourselves ... (is) that, potentially, one per cent of members would lapse on their product as a result," he said, adding that 2.5 per cent may downgrade from top hospital cover to a medium hospital product.
He said the 3.7 million was the number of members under cover, rather than policies held, so a family membership might have one family policy.
"So, if I was to translate those percentages to policies, I suspect 15,000 being that one per cent number (drop in cover), and a further 38,000 potentially might consider downgrading."
The government has previously estimated that nationally, 25,000 people may give up their private health cover if the planned changes went ahead.
Opposition health spokesman Peter Dutton said the government's own health fund said it would lose more members than Health Minister Nicola Roxon is predicting for the whole industry.
"Labor has cooked the books," Mr Dutton said.
"Their policy is going to kill private health insurance and just drive people into already overstretched public hospital."
A response was being sought from Ms Roxon's office.