Last month The New Daily published a copy of a 1994 letter sent by Medibank Private to longstanding fund member Derek Barton.

In the letter Mr Barton was warned by a customer manager that he would “lose the equity” he had built up with the fund if he did not renew his policy.

Mr Barton renewed his cover on the understanding that he was a member of a mutual health fund in which he was a part-owner.

• Read the full letter at the bottom of this story
• Do you know more? Email George Lekakis
• Medibank members call in ACCC

Following publication of the letter, Finance Minister Mathias Cormann rejected Derek’s interpretation of the letter, saying that the term “equity” used in the letter referred to certain product benefits that Medibank members earned for staying in the fund.

Today, Mr Barton – a book editor who has a professional grasp of English usage and the meaning of words – tells The New Daily what the letter led him to believe were his rights as a Medibank member.

My wife and I both feel our expectation of Medibank Private membership was that we were paying for private health insurance cover as ‘members’ of an institution run exclusively in the interests of those members – as a not-for-profit fund.

We understood it had been set up by the federal government but that, once set up, it operated independently of government solely in the interests of its members.

The nearest comparison, we thought, was that of the NRMA. We were members of the NRMA which operated as a not-for-profit institution offering ‘insurance’ against one’s car breaking down (different from insurance against accidental damage).

When the NRMA was demutualised we received a number of shares that were in part determined by the length of time we had been members.

For many years we have been under the impression that in the event that Medibank Private was privatised as members of the fund we would be entitled to shares.

The reason we held that view must go back to the information supplied by the fund in the early days of our membership and perhaps what we read in the newspapers at the time.

The letter dated January 1994 advised me that our payments were not up to date and that ‘… we would be sorry to see you lose the equity you have built up with the fund’. This certainly confirmed our view that we were contributing to a fund in which we had a share.

We understood the meaning of the term ‘equity’ to mean that we had some form of ownership. That this is the view of former staff and officers of the fund (to say nothing of many other members) appears not to be in dispute.

Whether that position was changed by legal manoeuvres of the Howard, Rudd or Abbott governments is unclear to me.

We are not lawyers, corporate or otherwise, but whenever there has been talk of ‘privatising’ Medibank I tried to talk to Medibank about possible entitlements and have met with a stone wall, ‘we know nothing’ response which has annoyed us considerably.

We feel that some sort of judicial enquiry to finally resolve this matter should be instituted (perhaps the ACCC can do this). Failing that, it should be tested in court as a class action.

Wherever the initial or subsequent fault lies, Howard, Rudd or Abbott, the truth is that the matter must be resolved once and for all.

We believe we are entitled to shares (at no cost or on preferential terms) and that a proportion of the $5 billion belongs to us.

Minister Cormann’s refusal to acknowledge that members might be entitled to some shares and that the government is entitled to the proceeds of $5 billion for a payment of $100 should mean that we are entitled to refer to him as The Terminator of members’ dreams, or at least The Predator.