NIB (ASX:NHF) share price higher on ACCC update

The NIB Holdings Limited (ASX:NHF) share price is pushing higher today after an update out of the ACCC…

| More on:
Digitised heart rate and share price chart with man on ipad in background signifying share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The NIB Holdings Limited (ASX: NHF) share price is pushing higher on Friday following the release of an update.

At the time of writing, the private health insurer's shares are up almost 1% to $6.10.

What was announced?

This morning the Australian Competition and Consumer Commission (ACCC) announced that it is planning to authorise Honeysuckle Health and NIB to form and operate a health services buying group for five years.

However, the proposed authorisation will include a condition limiting the size of the buying group, and the ACCC is now seeking submissions on its draft determination.

What are NIB's plans?

The Honeysuckle Health and NIB buying group intends to collectively negotiate and manage contracts with healthcare providers on behalf of private health insurers and other healthcare payers who join the group.

The ACCC considers the buying group is likely to result in public benefits by providing more choice for insurers and other healthcare payers, increased competition between buying groups, and giving participants more input into contracts and better information.

ACCC Commissioner Stephen Ridgeway said: "Our preliminary view is that authorising nib and Honeysuckle Health to form a buying group delivers public benefits that outweigh any potential adverse effects on competition,"

"Increased competition between buying groups is likely to incentivise the buying groups to provide better value to health insurers, which may reduce upward pressure on premiums for their members."

Though, the regulator doesn't want the buying group to become too powerful.

Mr Ridgeway explained: "Although we intend to authorise this arrangement, we would be concerned about the potential effect on competition if the group was to become too large."

"Many interested parties, including medical specialists, made submissions opposing the authorisation, and this led nib and Honeysuckle to make changes to limit the size of the group. The ACCC's preliminary view is that these changes and the condition limiting participation in the buying group are sufficient to address these concerns," he concluded.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended NIB Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Three people in a corporate office pour over a tablet, ready to invest.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

Senior man wearing glasses and a leather jacket works on his laptop in a cafe.
Broker Notes

Should I still swap my CSL for CBA shares or has the market corrected?

The two stocks have travelled opposite directions this month.

Read more »

Man with rocket wings which have flames coming out of them.
Resources Shares

Why Macquarie expects this ASX All Ords copper stock could surge 38%

With costs coming in below expectations, this ASX All Ords copper stock could rocket higher over the coming months.

Read more »

woman holding 'hiring' sign in shop
Broker Notes

Can you guess whether Macquarie prefers REA Group, CAR Group or SEEK shares?

Which ASX online classifieds business offers the best investment opportunity today?

Read more »

An ASX shares broker analysing a chart tracking the A2 Milk share price
Share Market News

Are these two struggling ASX materials shares undervalued?

Are these buy-low candidates?

Read more »

Female miner smiling in front of a mining vehicle as the Pilbara Minerals share price rises
Broker Notes

Expert says this ASX All Ords small cap mining stock could rocket 38%

Big upside ahead?

Read more »

Happy man working on his laptop.
Share Market News

5 things to watch on the ASX 200 on Wednesday

It looks set to be another good session for Aussie investors tdaoy.

Read more »

Two laughing young women hold shopping bags and ride an escalator up to another level in a Scentre Group shopping centre.
Broker Notes

3 ASX consumer sector shares to buy in July: expert

A leading expert has named its top 3 picks.

Read more »