Health funds talk of merger
AAP
The Canberra Times
Australia's second- and third-largest health insurance funds have discussed merger plans in a move which could lead to less competition and higher private health cover premiums.
AXA confirmed last night that it had talked to MBF about joining forces to create a national health fund worth billions of dollars, rivalling market leader Medibank Private.
After prodding from the Australian Stock Exchange, AXA said, "The company has been in discussions regarding the future of our health business with a number of parties, including merger talks with MBF."
The Australian Competition and Consumer Commission said it would take a close look at any merger between the funds, which would have more than 2.5 million customers.
Medibank is already under fire for requesting government permission to lift its premiums by a reported 13 per cent.
And Labor said it would oppose any merger if it meant higher fees for consumers in a less competitive market.
Opposition Leader Simon Crean said any merger had to be assessed against the possibility of higher premiums.
"If it, as a result of lessened competition, leads to higher premiums of course we [oppose mergers]," he told ABC radio.
The chairman of the ACCC, Allan Fels, said the commission would weigh up the impact of any merger on the amount of competition in the market.
Medibank had 30.7 per cent of the market and a merged AXA-MBF would have 27 per cent, leaving HBF (8.8 per cent) and HCF (7.3 per cent) far behind.
"The ACCC has a policy of looking closely at mergers where, following the merger, the market share of the top four firms makes up around 75 per cent or more of the market," Professor Fels said. "In this case, the share would be very close to 75 per cent and therefore would be closely examined."
Treasurer Peter Costello said he expected any merger would require government approval, but he had not yet looked at the issue.
The president of the Australian Medical Association, Kerryn Phelps, said of Medibank's reported bid for a 13 per cent premium rise, "When you have families on tight budgets who have been encouraged into private health insurance it is only fair that they know the true financial state of the funds and why they are being asked to contribute more and more in premiums."