Medibank Private and NIB Holdings shares higher on premium increase news

The Medibank Private Ltd (ASX:MPL) share price and the NIB Holdings Limited (ASX:NHF) share price are both higher in morning trade after announcing their premium increases for 2019…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In morning trade the Medibank Private Ltd (ASX: MPL) share price and the NIB Holdings Limited (ASX: NHF) share price have been on the move following the release of premium increase details for 2019.

The Medibank Private share price is currently 3% higher and the NIB share price has pushed 1.5% higher.

Here's a summary of what to expect in 2019 from these private health insurers:

Medibank Private's premiums.

Medibank and ahm health insurance premiums will increase by an average of 3.3% from April 1 2019, which will be the lowest average premium increase in 18 years.

In addition to this, the company notes that many of its customers will be able to lower their premiums due to Medibank's early adoption of the Federal Government's private health insurance reforms.

Medibank has adopted voluntary discounts for 18 to 29-year-olds on hospital policies from April 1, which effectively reduces its average premium increase to 3.09%.

NIB's premiums.

According to a release by nib this morning, it has received approval from the Federal Minister for Health to increase insurance cover premiums for nib health funds by an average of 3.38% across all products.

GU Health insurance premiums will increase by an average of 1.80%. As with Medibank, these changes will take place on April 1.

Should you buy these private health insurers?

I think this was a reasonably positive result for Medibank Private and NIB Holdings and wouldn't have been surprised to have seen lower increases implemented given affordability issues.

However, given the lack of wage growth in Australia, I don't expect things to improve greatly for either company next year and feel those outside the system are unlikely to be in a rush to join up any time soon.

In light of this, I intend to stay clear of these two companies and private hospital operator Ramsay Health Care Limited (ASX: RHC) until trading conditions improve.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended NIB Holdings Limited and Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

A young bearded man wearing a white t-shirt with a yellow backdrop holds up his arms to his chest and points to the camera in celebration of ASX shares rising today
Share Gainers

Why Bigtincan, DroneShield, Guzman Y Gomez, and Helia shares are racing higher

These shares are having strong sessions on Thursday. But why?

Read more »

Three girls compete in a race, running fast around an athletic track.
Share Gainers

Here's why ASX uranium shares like Deep Yellow are running hot today

ASX uranium stocks are on fire this Wednesday.

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Why Chrysos, Hansen Technologies, Pantoro, and WA1 Resources shares are pushing higher

These shares are having a good time on hump day. But why?

Read more »

piggy bank at end of winding road
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors enjoyed a lucrative Tuesday session today.

Read more »

A man sees some good news on his phone and gives a little cheer.
Share Gainers

Why Capitol Health, Infratil, Newmont, and Race Oncology shares are charging higher

These shares are having a good session. But why?

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why Capitol Health, Capricorn Metals, Credit Clear, and Telix shares are storming higher

These shares are starting the week with a bang. But why?

Read more »

Three exuberant runners dash towards the camera. One raises her arms in triumph; another jumps in the air with arms raised. The third runner gives a satisfied smile.
Share Gainers

3 ASX 200 shares going gangbusters in June

ASX 200 investors have sent these three stocks soaring in June. But why?

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Share Gainers

Why Boss Energy, Judo Capital, Life360, and Paladin Energy shares are pushing higher

These shares are ending the week on a high. But why?

Read more »