Mum and dad investors are being urged to register their interest in the Medibank privatisation, in the first stage of a sell-off which could raise about $4 billion for the federal coffers.
The share sale process kicked off on Sunday with a government campaign trumpeting the chance for Australians to share in the future of the nation's largest private health insurer.
The 3.8 million Medibank policy holders will be given priority access to the stock, with the opportunity to snap up a greater share allocation than non-policy holders.
Finance Minister Mathias Cormann said the government anticipated a "large amount of interest" in the sale and said all Australians should consider pre-registering for the prospectus.
He said there was "absolutely no good reason" for the federal government to own a private health insurance business in what he described as a well regulated, competitive market of 34 private health funds.
Privatisation will remove the government's conflicted role as both the largest provider and the market regulator. It will also free up funds to reinvest in major infrastructure, Senator Cormann said.
"Medibank Private, which is already performing very well, will be able to perform even better in private hands," he told reporters in Melbourne.
Senator Cormann denied privatisation would lead to higher insurance premiums.
"Medibank Private, post sale, will continue to operate in a highly competitive market, will continue to have to compete for customers with 33 other health funds and that of course will put a natural limit on Medibank's capacity to lift premiums beyond what is competitive," he said.
He refused to say how much the government hoped to raise from the float, slated for December.
"The best possible net return for taxpayers - that's what our objective is with this sale," Senator Cormann said.
AMP chief economist Shane Oliver said at an expected $4 billion, the initial public offering (IPO) was one of largest seen in Australia for some time.
"Along with other capital raisings and IPOs in the next few months, this means quite a lot of money will be drained out of the market," he said.
The prospectus, which will indicate the price per share, will be available in the second half of October with the enterprise due to list on the domestic stock exchange by December.
Senator Cormann said the public would get first access to buy shares, before the sell-off proceeds into the institutional phase.
But he said no buyer could own more than 15 per cent of the company.
Medibank chairman Elizabeth Alexander welcomed the announcement.
"We're excited for this new opportunity for Medibank and what it may bring and we are pleased to be proceeding with this next step that will lead us to our debut on the Australian stock exchange," she said.
Medibank said it would not be able to measure the level of public interest in the sell-off for at least 24 hours.
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