Medibank Private Ltd will formally merge with Health Services Australia on Wednesday as part of a federal government plan to improve health services.
The two government-owned businesses will continue to operate under their separate names, but will offer more integrated services, they said in a joint statement.
The merger was announced by the federal government in December.
Medibank Private managing director George Savvides said the merger would make the company a broader health company, offering occupational and travel health services rather than just insurance.
"We are moving from the traditional health insurance role of passive payer, to be an active participant in our members health and wellbeing," he said in a statement.
HSA has also welcomed the merger.
Medibank Private is Australia's largest health insurer, with 3.5 million members.
Mr Savvides said Medibank Private was working to take pressure of its premiums, and improving efficiency in its customer service.
"Specific initiatives include moving store openings from 9am to 10am when traffic is minimal, and changing staff hours to make more customer service officers available at peak times," he said.
Retail centres are also to be made cashless.
