Aussie government may sell Medibank

The Australian Government said it may sell Medibank Private, the nation's biggest health insurer valued at as much as A$1 billion ($1.1 billion), after the company returned to profit in the past two years.

The Government will update a previous study completed in 2003 on Medibank, which covers almost one in three privately insured Australians, Finance Minister Nick Minchin said.

The decision to review a possible sale comes after Melbourne- based Medibank Private turned to profit after a loss in 2002 and as the Government in July became the first in 24 years to control both houses of parliament.

An aging Australian population is boosting demand for medical services.

Health insurance membership among all groups rose by nearly 34,000 people in the three months ended Dec. 31, the second-highest quarterly increase since September 2000, according to figures compiled by the Australian Private Health Insurance Administration Council.

The Government will hire an investment bank to do the study, with details sent to candidates in the next few weeks, Minchin said.

Carnegie Wylie & Co. did the study in 2003, when the government valued the insurer at A$500 million to A$1 billion.

State-owned Medibank Private has about 30 per cent of Australia's health insurance market, covering about 3 million people, according to the insurer's Web site.

It posted a A$44.8 million profit in the year ended June 30, 2004.