Medibank Points the Finger at Health Providers as Claim Costs Rise

Narrow-moat Medibank Private hosed down fiscal 2020 earnings expectations on higher-than-expected claims inflation. Medibank’s actual claims growth per policy holder was 2.4% in fiscal 2019, compared with the 2% it had reported. It blamed a longer than usual lag in hospitals submitting claims for the discrepancy. With similar inflation continuing into first-half fiscal 2020, the insurer expects the trend to continue for fiscal 2020. Management attributed the higher claims to higher private hospital payments, which reflects an increase in the average benefit size along with the continuation of elevated prosthesis costs.