Health insurer NIB expects government efforts to boost private cover, plus solid economic conditions, to fuel continued growth in the sector.
Chief executive Mark Fitzgibbon told a business conference he expects the private health insurance sector to continue to grow by two to three per cent a year.
Government incentives, or "carrots and sticks", economic conditions and a lack of confidence in the public health system would underpin the growth, he said.
The National Commission of Audit, released last week, recommended pushing people on higher incomes into private cover, allowing private insurance to cover GP visits, the deregulation of premiums, and allowing private health insurers to reward good health behaviour with premium discounts.
Mr Fitzgibbon said the recommendations, if implemented, would drive more people into taking up private health insurance and also benefit consumers.
"The more participation you have in the private health system the less pressure there is on premiums," Mr Fitzgibbon told AAP after the conference.
He said the broader insurance pool needed to be continually refreshed with new policyholders.
Mr Fitzgibbon also said he expects the public float of Medibank Private to lead to some of the players within Australia's health insurance sector joining together, albeit slowly.
The Abbott government plans to privatise Medibank Private during 2014/15, with analysts forecasting the insurer could fetch around $4 billion.
Medibank Private is Australia's largest private health insurer with around 29 per cent of the market.
NIB has around eight per cent of the market.
"As a private company they (Medibank Private) are likely to be more aggressive and have a greater appetite for investment in growth," Mr Fitzgibbon said.
"And as a private company they can raise capital, which will make them more acquisitive."
NIB's shares were down two cents at $2.93 on Wednesday.
