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Medibank court battle looms

AAP

AAP

A former senior health bureaucrat believes the dispute between the Abbott government and policyholders over who owns Medibank Private might only be resolved in the courts.

Stephen Duckett, a former secretary of the federal health department during the reign of the Paul Keating Labor government in the 1990s, said that evidence published in The New Daily indicated that fund members may be able to mount a legal argument for their equity rights.

The New Daily on Monday published a letter (excerpted below) written by a Medibank manager in 1994 that asserted members had equity in the health fund.

newdaily_061014_medibank_excerpt_letter_copy“The letter says that members had equity in the fund and it appeared to be the case that this was an element in Medibank’s marketing of policies,” Mr Duckett said.

“That means some people were led to believe, or thought, that they were buying into a mutual fund.”

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Mr Duckett, who is now the director of health and policy at the Grattan Institute, noted that some members were seeking legal advice and that the stand-off between the government and policyholders might be decided in the courts.

“Obviously the government has indicated that an allocation of free shares is not part of their plans for the float,” he said.

“I’m not a lawyer, but it looks like members have a case that could be at least arguable.”

AAP

Stephen Duckett believes Medibank members may have a case against the government. Photo: AAP

Retired Queensland Liberal MP Don Cameron also weighed into the ownership debate.

Cabinet documents obtained from the National Archives show that Mr Cameron was a prominent figure in party room discussions on Medibank Private during the final term of the Malcolm Fraser government (1980-1983).

Mr Cameron is adamant that members have a claim to the reserves and assets of Medibank Private.

“There may well have been a point in time recently when the government began to rationalise Medibank Private as an asset for sale, but much of the money on its balance sheet really belongs to those people who put it there – the members,” he told The New Daily.

“The tragedy of Medibank Private is that governments of both political persuasions have viewed it as a fund to be milked.”

Mr Cameron said he was critical of moves by the Kevin Rudd and Julia Gillard governments to extract bonus dividends from the reserves of Medibank Private.

Financial accounts of the health insurer show that former Labor governments harvested hundreds of millions of dollars from members’ reserves.

“When Wayne Swan plundered Medibank Private to help improve his books he was really taking members’ money,” Mr Cameron said.

“It could have been used to reduce premiums of policyholders.”

David Gronow, the organiser of a petition demanding compensation for Medibank members, said he agreed with Mr Cameron’s observations regarding the degradation of the fund’s reserves.

He said various documents published by The New Daily and disgruntled members at the petition’s website proved that members were owners of the fund.

“The fact that Medibank Private sold and marketed policies that we had equity as part of our memberships has been proven by documents released to the media by concerned people who have signed our petition,” he said.

“Over coming weeks we are confident that a treasure trove of documents will be released to reinforce that members always had equity in Medibank Private.”

Readers can view the members’ petition at change.org here

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