The federal government insists maintaining competition and service quality will be key concerns of its proposed privatisation of Medibank Private, as Labor seeks guarantees premiums won’t rise because of the sale.

Finance Minister Mathias Cormann has released details of a scoping study into the sell-off, which could raise about $4 billion, saying there is “no compelling policy reason” for the government to own the health insurer.

The study, to begin by the end of November and be provided to the government by the end of February, will provide recommendations for the sales process, method, timing, cost and the estimated proceeds.

Senator Cormann said the study would be “framed” around objectives such as how the sale would contribute to competition in the sector, how staff were treated, and that service quality was maintained.

With 3.8 million members, Medibank Private is Australia’s largest health insurance provider.

“The privatisation of Medibank will remove the current conflict where the government is both the regulator of the private health insurance market as well as a large market participant in a competitive market,” Senator Cormann said.

“Proceeds from a sale of Medibank would allow the government to fund other policy priorities or pay off debt.”

The sale of Medibank Private follows a long line of privatisations – chief among them the staged sell-off of Telstra, the $2.1 billion sale of Qantas in 1993 and $8.1 billon reaped from offloading the Commonwealth Bank in 1996.

The Labor opposition and the Australian Medical Association have raised concerns that a sell-off will increase premiums and reduce competition in the sector.

But Prime Minister Tony Abbott has played down those fears, saying it was the government who set premiums in a competitive market.

Shadow treasurer Chris Bowen said Labor would want to see modelling on how premiums would be impacted before backing any privatisation.

“We would look to the government to provide a guarantee it would not put upward pressure on health insurance premiums,” Mr Bowen told AAP.

“We would have a process to go through and we would be looking very careful at the impact on health insurance premiums.”