The Medibank Private Ltd (ASX: MPL) share price is seesawing today after the company said it would be deferring its premium increase.
At the time of writing, the private health insurance giant's shares are exchanging hands for $3.38, the same as yesterday's closing price. However, they have spent time in the red and the green today.
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Medibank pushes back date on premium increase
According to the update, Medibank has returned roughly $135 million in COVID-19 savings to customers. This comes after it decided to defer next year's premium increase for 5 months.
Originally, Medibank and Ahm health insurance premiums were set to lift by an average of 3.1% from April 2022. The adjustment will be the lowest average premium increase in the last 21 years. However, this now won't happen until 1 September 2022.
The latest financial support package boosts the company's reputation in becoming socially responsible. So far, Medibank has returned about $435 million of relief to policyholders. However, the news hasn't done much for the Medibank share price.
Medibank CEO David Koczkar commented:
We have worked hard to deliver our lowest average premium increase in 21 years, recognising the importance of keeping private health insurance affordable.
While we know no one likes their premium to go up, healthcare costs are continuing to increase at a rate much higher than general inflation.
We support the Government's commitment to reform the prostheses list, which could save the industry up to $500 million, with savings expected to be realised over the next 4 years. We remain committed to passing on any related savings to our customers through lower premium increases and we will continue to advocate for changes that support the long-term sustainability and affordability of private health insurance.
Medibank share price snapshot
Over the last 12 months, the Medibank share price has been on par with the market, up 12%. In comparison, the S&P/ASX 200 Index (ASX: XJO) has also risen by 12% over the same time frame.
It's worth noting that Medibank shares reached a 52-week high of $3.62 in September, before moving in a sideways channel.
Medibank has a market capitalisation of roughly $9.3 billion, with approximately 2.75 billion shares on issue.
