HEALTH LEGISLATION AMENDMENT (PRIVATE HEALTH INSURANCE REFORM) BILL 2003: Second Reading
Mr CADMAN (Mitchell) (12.48 p.m.) —Thank you, Mr Deputy Speaker. I will follow your injunction with care. I was listening for some time, from my room, to the previous member and was aware of her transgressing the standing order that I know you are going to enforce. [start page 24288]
The Health Legislation Amendment (Private Health Insurance Reform) Bill 2003 before the House is part of a total approach that the government has adopted to improve the health care services of Australia. About one-third of the total federal budget is involved in health or health related expenses. If you include the Tough on Drugs program and the medical research programs, over one-third of all funds raised by the Commonwealth in some way or another find their way into health related expenses. This is a massive commitment by the Commonwealth. In addition, you will be aware that the state governments have the responsibility for the delivery of medical services. As such, it is their role to make sure that the regulation of doctors working within states and the operation of public hospitals are properly carried out and that they provide the service they are designed to give to people requiring health services, and also that the inspection and maintenance of standards for health care providers are maintained at appropriate levels.
It has been a concern to successive governments that the cost of health and medical procedures rises much more quickly than inflation. Covering the cost of medical services—because Australians want and need the best possible services—has been difficult to deal with for successive governments. This government has adopted an approach which I believe is the only sensible approach—that is, to encourage people to self-insure. Not everybody needs a system provided by the taxpayer and, where possible, people should insure to protect their health needs and to cover their health payments. That means that they can purchase packages of insurance that suit their particular family. It means they can make decisions about what scale of support they need. It also means that health services become more responsive to actual patient and client needs, rather than being based on some calculation performed by governments. So the government's role since coming to office, I think, has been very sensible and has had a high degree of success in encouraging people to insure for their health services. The legislation before the House today goes further in a number of areas.
It has been drawn to my attention that we are in the process of celebrating 20 years of Medicare, and the minister has supplied me with some details of what Medicare has done. In 20 years, Medicare has processed 3.5 billion services and paid $103 billion in benefits, successfully delivering one of the largest health payment systems in the world. These are fascinating statistics. Seventy-five per cent of the 3.5 billion services have been bulk-billed. The bulk-bill rate in 1984-85 was 45 per cent; in 2003-04, it was 68 per cent. Twenty-seven per cent of the population is younger than Medicare. Sixteen million Australians went to a GP last year.
The addition that this legislation starts to put in place with MedicarePlus is a $2.4 billion program which will strengthen and protect Medicare. The Health Legislation Amendment (Private Health Insurance Reform) Bill 2003, which we are looking at today, is designed to strengthen the process of Medicare and to provide better access for certain individuals and also to provide a safety net for many others. Coinciding with Medicare's 20th birthday—coming in at the same time in the same period—is the introduction of a major plank of the reform: an additional $5 for every bulk-billed service provided to Commonwealth concession card holders and all children under the age of 16. That is a conjunction of two events: 20 years of Medicare and the introduction of MedicarePlus with the additional $5 for the medical services provided to concession card holders and all children aged under 16. That means that families and low-income earners are automatically bulk-billed and doctors are encouraged to provide bulk-billing services. There are additional parts of the package that relate to rural and outer suburban areas and access to Medicare, nursing and nursing homes and those sorts of additional provisions.
I note that the Senate committee inquiry into the MedicarePlus package is due to report today, when senators will prepare to debate the legislation. I understand that the member for Lalor, who is the spokesman for the Australian Labor Party on health matters, said Labor would oppose the legislation, leaving—as we see it from this perspective—its fate in the hands of four Independent senators. I think that is a strange way of making health policy. The Australian Labor Party needs to consider whether it is going to be part of the solution or part of the problem and to be seen as such.
There are exciting changes being proposed in this legislation. To begin the process, we look at the main provisions of the health legislation amendment bill and first of all look at the product changes—that is, the introduction of the new way in which the product changes can be made, which was previously done by applying to the secretary but which is now done in a way which gives more freedom. Also, while there is more freedom on the part of the industry—and we need a bit of imagination in the way in which health insurance is provided in Australia—the changes toughen the role of the minister and his capacity to investigate and to apply some sort of discipline to any organisations that play games. So the sanctions under the national health agreement are strengthened by this legislation.
In relation to product changes, health funds are required to provide 60 days notice to the secretary—I was in error previously—where the minister is of the opinion that a change might result in a breach of the act or conditions of registration of the organisation, impose an unreasonable and inequitable condition affecting the rights of any contributor, or, having regard to the advice of the council—which I will refer to later—adversely affect the financial stability of a health benefit fund. The minister may disallow the change. So the minister may disallow the increasing of premiums if he or she is of the opinion that the change would be contrary to the public interest. So that provision is there. The government, at the end of the day, can make a commitment that changes such as increased charges are unnecessary and should not go ahead. The Private Health Insurance Ombudsman also has a role in this: to investigate whether changes are necessary or not. [start page 24289]
In regard to the sanctions for breaches of the act, the minister must be satisfied there has been a breach. He can take the following action. He can request an enforceable undertaking. He can enforce a commitment that he requires a fund to make. He can give a direction to a health fund. He can impose a further condition of registration on the fund. The minister may revoke the status of the health fund to offer a 30 per cent private health insurance rebate as a premium reduction. He can apply to the Federal Court for an order or he can take action to appoint an inspector, place a health fund under administration or seek the winding up of a health fund.
Both the minister's investigative powers and his powers to apply sanctions have increased. I think this is a very sensible way of proceeding, giving more freedom to the industry and some capacity to be more imaginative and to better tailor packages that will suit the health needs of the community. Alongside that are greater powers for the minister to intervene should the funds or any part of the industry contravene the best interests of Australian health seekers or taxpayers. Other actions open to the minister—where there has not been a breach but where the minister considers the performance of the fund could be improved—would be to request an enforceable undertaking, give a direction to the health fund or impose a further condition of registration on the fund. So the minister can intervene not only when there are breaches but also when a fund appears to be failing in its duty to the Australian community.
There are proposals in this legislation to expand the powers of the Private Health Insurance Ombudsman. The office of the ombudsman is a statutory body and its main role is to provide an independent complaint and advisory service to private health insurance contributors. The powers of this organisation will be increased so that it might deal with complaints, publish aggregated information on complaints, conduct investigations and make recommendations about regulatory practices and industry practices that affect health insurance funds. In the Private Health Insurance Ombudsman we have someone that the public can appeal to. The minister has a capacity to intervene and even prevent rises or changes that are not in the best interests of the Australian community. It is a loosening up of the funds and the capacity for the types of services or health packages that they may want to submit for consideration by the Australian public.
One of the most significant features of the changes introduced by the government, which has been mentioned by previous speakers in this debate, is the Lifetime Health Cover. That was introduced in July 2000, and I think that has had more impact than the 30 per cent rebate as people realise there is an imperative—provided they have an income of $50,000 or more—to get into the system: if they do not, penalties will start. The introduction of Lifetime Health Cover means that health funds are able to charge a premium on contributions if a person fails to take up private hospital cover. Since July 2000, those who delayed taking up hospital cover pay a two per cent loading on top of their premium for every year they are aged over 30 when they first take out hospital cover. I have an example here from a Parliamentary Library paper. A 50-year-old taking out cover in April 2001 would pay 40 per cent more for cover than if they had taken it out a year earlier.
Private hospital cover is not compulsory, but a person earning over $50,000 must pay a premium and is required to pay an annual 1.5 per cent Medicare surcharge. I think this has been one of the most successful processes in encouraging people to join funds. With further changes and a bulk-billing safety net I believe we will have a system that will serve Australians extremely well. In response to concerns that it is difficult for funds to advertise or run marketing campaigns based on Lifetime Health Cover, this legislation seeks to make the birthday of all Lifetime Health Cover the same day. That is a sensible thing. I know there are other fields where the same process is used. It will make administration and advertising much simpler and much more easily followed by the Australian public.
The MedicarePlus program, as it develops, will continue to maintain the three basic pillars of Medicare: that all Australians are eligible for bulk-billing and receive the medical benefit rebate, that they receive free public hospital care and that they receive subsidies through the Pharmaceutical Benefits Scheme—something that has been in the news over the last week or so as Australia negotiated the free trade agreement with the US. The government has stuck by the need to maintain the Pharmaceutical Benefits Scheme. This legislation deals with other aspects of Medicare. It is easy for all Australians to see that the maintenance of the pillars of Medicare—access to bulk-billing, free public hospital care and subsidised medicines through the Pharmaceutical Benefits Scheme—has been complemented by the 30 per cent rebate for private health insurance. [start page 24290]
The introduction of MedicarePlus will create additional capacity for bulk-billing, particularly for children and concession card holders. Another aspect of this legislation is a new safety net to cover all Australians for high or unexpected medical costs. That is traumatic cover, something that I think will be welcomed by all Australians. It will cover car accidents and accidents of all types, whether industrial or home based. Heart failure, cancer and those sorts of traumatic things are covered under the new MedicarePlus safety net.
Whether people's health suffers through an accident or a serious illness and whether they need X-rays, specialist consultants, psychiatry, CT scans, MRIs, radiation or oncology, all of those things are going to be covered by MedicarePlus. Here we have a package that gives more flexibility, greater supervisory powers to the minister and additional powers to the ombudsman, all backing up the framework under which MedicarePlus is coming into being, and all the time we have the Australian Labor Party saying, `We won't support it.' I think that that is an irresponsible position and I know the people of Australia will think so too when they understand the benefits that can flow from these changes.
It is almost as though the Australian Labor Party, without coming to government, want to run the show. They would be far better off letting the government do its job. If the government fails they can then target the government and successfully criticise it for its failures. But criticising the government for the failure of a program that has not been introduced and that the Labor party wants to change really does not get traction out there in the community. We have had a most successful change to health services, unlike the New South Wales government. There is trauma and chaos right across south Sydney, with dreadful situations in the public health system. (Time expired)
Author: Hon Alan Cadman MP
Source: House Hansard - 11th February 2004
Release Date: 18 Feb 2004