AUSTRALIA's largest private health insurer, Medibank Private, is the country's only health fund to have been upgraded by Standard & Poor's to an A rating - up from its BBB this time last year.
Medibank Private is one of 10 health funds to undergo analysis by international credit ratings company, Standard & Poor's - its ratings being based on 1998-99 year-end financial results.
Commenting on the outcome, Medibank Private's Managing Director, Mark Burrowes, says the health fund's move to increased profitability stems from a combination of improved cost control and a significant increase in membership following the introduction of the Federal's Government's 30 per cent rebate in January last year.
The purpose of the rebate was to make private health insurance more affordable and encourage many more Australian's to take out private health insurance.
"While all private health funds had the opportunity to benefit from this government initiative, it was Medibank that moved rapidly to capitalise on this initiative," says Mr Burrowes.
He is confident that Medibank's credit rating will increase even further next year given the dramatic uptake in private health insurance with the introduction of Lifetime Health Cover (LHC).
"During the March quarter alone our share of the health insurance market has grown to 27.3 per cent - with an 117 per cent increase in net memberships compared with the same period last year."
At the end of April over 2 million people were covered by Medibank.
Mr Burrowes says that while Government's 30 per cent rebate and Lifetime Health Cover initiatives have contributed significantly to Medibank's increased profitability, the health insurer's value for money product offerings, its series of prominent campaigns and its position as the only national private health fund, have also made a major contribution.
Medibank's improved financial position will be used to the benefit of members, says Mr Burrowes. "It will allow us to keep our rates down and to assist in the introduction of major new initiatives - such as the implementation of gap cover and the push into harnessing technology through e-commerce initiatives," he says.