Government moves closer to selling Medibank

The Australian Government-appointed investment bank Carnegie, Wylie & Co to advise it on the possible sale of Medibank Private, the nation's biggest health insurer.

Carnegie will update its previous study completed in 2003 to "assist the Government in its consideration of whether or not to sell Medibank Private", Finance Minister Nick Minchin said in Canberra yesterday.

An aging population is boosting demand for medical services.

Health insurance membership among all groups rose by nearly 34,000 people in the three months ended December 31.

This was the second-highest quarterly increase since September 2000, according to figures compiled by the Australian Private Health Insurance Administration Council.

The federal Government is again considering a possible sale of Melbourne-based Medibank Private after it turned to profit from a loss in 2002 and as the Government in July became the first in 24 years to control both houses of Parliament.

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 website. It posted a A$44.8 million ($48.7 million) profit in the year ended June 30, 2004.

The Government decided in 2003 to retain public ownership of Medibank after a A$175 million loss in 2002.

Carnegie's study is scheduled to be completed by the end of the year, Minchin said.

- BLOOMBERG