The NIB Holdings Limited (ASX: NHF) share price is outperforming the S&P/ASX 200 Index (ASX: XJO) on Friday afternoon.
At the time of writing the private health insurer's shares are up 2% to $5.08. This compares to a disappointing 3.3% decline by the ASX 200 index.
Why is the NIB share price pushing higher?
Investors have been buying the company's shares on Friday after it unveiled a members and community support package in response to the COVID-19 pandemic.
The company's managing director, Mark Fitzgibbon, explained that NIB and the rest of the industry have an important and critical role to play in helping Australians through this challenging period.
He said: "Many of our members confront profound uncertainty and the threat or reality of unemployment. We are doing as much as we can to help them maintain their cover and more broadly, stay safe and healthy."
"The crisis has actually presented health insurers and the total private health system with a unique challenge to demonstrate how we can play an enhanced role in our total healthcare system," he added.
What is NIB's support package?
According to the release, NIB's support package includes:
- Expanded coverage for chest, lung, kidney, and bladder or other treatment related to COVID-19 across all levels of hospital cover at no additional cost until the crisis passes. This means more than 300,000 policies or over 560,000 of its members will now have access to COVID-19 treatment who would otherwise not be covered.
- Ability for existing members who are experiencing financial hardship to access special premium relief. This includes the option to suspend their health insurance policy and premium payment for up to six months while remaining covered for COVID-19 related treatment.
- The company is making its specialist health management and emergency assistance team, nibAssist, available 24/7 for members who require COVID-19 medical and non-medical health support.
- A $1 million donation from nib foundation and nib to support charitable initiatives assisting the community during the pandemic. It will also be exploring a range of clinical and community health initiatives to assist in the identification and treatment of those vulnerable or at risk to COVID-19.
Finally, looking ahead, Mr Fitzgibbon added that anticipated savings from the deferral of elective surgery will be considered later this year as part of its next round of premium pricing changes.
Rival Medibank Private Ltd (ASX: MPL) has not yet responded to this, but I suspect it is quite likely to follow suit and support its members with a similar package.
