Former Medibank Private chairman Fred Millar says the insurer’s policyholders have been treated poorly in the government’s move to take over and sell the business.
He said he was “very sure” the insurer “belonged to contributors”, but feared the government may have “shut the gate” on their rights to ownership.
Mr Millar, who is now 91, told The New Daily in a phone interview that he and other directors of the Health Insurance Commission viewed their roles as custodians of the policyholders’ assets.
“I always took the view that Medibank Private belonged to its members,” he told The New Daily.
“I was very sure it belonged to contributors.”
Mr Millar said the statements he made in the 1988 annual report about the ownership of the health fund reflected the views of other members of the board at the time.
“If the legislation had transferred the ownership then I think that the horse may have bolted.”
He said that it would be unfair if members’ rights were no longer recognised, but conceded that he had not been following recent developments in the business very closely.
When asked whether he thought that members had been treated poorly by government moves to take control the business, he said:
“Of course, I’d be a beneficiary if it was otherwise, because I am a member and have been a member of Medibank Private for many years.”
Mr Millar, who was a widely respected lawyer during his working life, is concerned that the government may have “shut the gate” on the ownership question with passage of 1997 legislation that restructured Medibank Private.
“If the legislation had transferred the ownership then I think that the horse may have bolted,” he said.
“I would have to take legal advice on how ownership was passed to the crown.”
Few people can lay claim to having shaped the business fortunes of Medibank Private more than Mr Millar.
When he took over as chairman in November 1980, the health fund was still emerging from an agonising entry into the Australian medical insurance market.
In its second year of operation in 1978 Medibank Private posted a net loss of almost $21 million and was technically insolvent.
The 1978 financial accounts show that the fund did not have sufficient reserves to meet claims from policyholders.
But, by the time he left the business in 1995, Medibank Private was the largest private health fund in the country with surplus cash and reserves exceeding $360 million.
In a 1988 letter to the then minister for health, Neal Blewett, Mr Millar asserted that the members of Medibank Private were the legal owners of the fund’s assets, not the government.