On December 19, 2018, Medibank Private Limited (ASX: MPL) came forward and made an announcement related to the premium increase which would commence from April 1, 2019. As per the press release, ahm as well as Medibank would be raising their health insurance premiums by 3.30% (average). This increase in the premiums happens to be the lowest increase (average) considering the time span of 18 years. The press release which was issued also stated that the numerous customers would be eligible to reduce the premiums as the Medibank has managed to adopt PHI (or private health insurance) reforms of Federal Government.
The announcement made by the company also stated that reforms might lead to a reduction in the premium increases with respect to the customers of Medibank. Moreover, they also give greater choice to the Medibank’s customers. These reforms which have been discussed are made up so that the private health insurance becomes easier as well as affordable. The announcement also contains the comments from the top management of the company. As per the top management, there have been challenges regarding the deliverability of the quality healthcare with respect to the affordable prices and that is the primary reason that the company had finally decided to adopt private health insurance reforms. As a result, the customers would now be able to reduce the premium increases.
The younger customers of Medibank would be benefited. The company’s customers which are between 18-29 years of the age are eligible to avail the youth discount with respect to the hospital cover which would reduce their premium increases. The management of the company had also stated that they, as well as the employees, have been focusing on pressure which has been over health system as well as on the customers. They are also focusing on the budgets of households of the customers. The management has also maintained its focus towards extending more affordable alternative care settings.
In FY 2018, the company has managed to pay $5.3 billion towards the benefits to the customers of ahm as well as Medibank thus, helping over 1.3 million admissions to the hospital, 23.8 million extras services as well as 500,000 surgical procedures. The press release issued by the company also stated that the customers of ahm, as well as Medibank, would be given the formal notification with respect to the new premium with the help of email or post. This notification would be provided to them from February 2019.
Let us understand how the stock has performed today. On December 19, 2018, Medibank Private Limited ended the session in green as the stock closed at A$2.400 per share which implies that it had witnessed the rise of A$0.040 per share or 1.695%. The market capitalization of Medibank stood at $6.5 billion. The annual dividend yield of the company stood at 5.38%. The stock price of the company is trading towards the lower level.
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