Monday, 27 May 2013
Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012, Private Health Insurance Legislation Amendment (Base Premium) Bill 2013; Second Reading
I rise today to speak to the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2013. The changes within these bills are yet another in a long line of betrayals of the Australian people by this Labor government and will be yet another turn of the vice for over 71,000 people within my community who have private health insurance and who are going to be hit by higher costs as a result. This is another broken promise. This government has promised time and time again that it would not make changes to the private health insurance rebate.
The Prime Minister herself is on the record, as far back as 2004, as the then shadow health minister, giving guarantees that the private health insurance rebate would not be changed under a Labor government. In September 2004, she said:
I grow tired of saying this—Labor is committed to the 30 per cent private health insurance rebate.
And then again, in 2005, she gave what she called an ironclad guarantee that she would not be making changes to the private health insurance rebate. She said, 'For all Australians who want to have private health insurance, the private health insurance rebate will remain under a Labor government.' Even then the health minister Nicola Roxon is on the record as saying in 2009 that:
The government is firmly committed to retaining the existing private health insurance rebates.
But just like every other promise that this Prime Minister and her ministers make it is not worth the breath in which they say it. This government is trying to extract a pound of flesh from the Australian people with these changes to the private health insurance rebate.
Lifetime Health Cover was introduced by the Howard government and has been in effect since 1 July 2000. LHC is a loading on private health insurance premiums that is applied at a rate of two per cent for every year that an individual is over the age of 30 when they take out hospital cover. A cap of 70 per cent is applied. It is intended to ensure people take out private health insurance at an early age and maintain their cover. And it has been successful, with the number of people with private health insurance increasing 75 per cent from 6.1 million to over 10.7 million people.
Currently, the government pays the private health insurance rebate on the value of the total premium paid by the policyholder, including the LHC loading component. This is yet another case where the government is unable to reign in the waste and mismanagement in the areas it needs to and is instead trying to rip funds out of the pockets of Australian families—families who use private-sector funding to access the range of medical services that they need.
These changes are going to put a bigger burden on families in my electorate. These cuts will further add to Labor's cost-of-living burden on working Australians. After years of waste and mismanagement, Labor is hiking prices for working Australians to pay for their own fiscal incompetence. This is not a decision that has short-term implications; this will have far-reaching effects.
Singles, couples and families join private health care funds to ensure they have access to the quality of care that they may need for themselves or others in their family. These services may include hospital cover, general dental, major dental, optical, physiotherapy, chiropractic, natural therapies, elective surgery, pregnancy and birth services. They also include hospital services such as removal of tonsils; dental surgery; appendicitis treatment; ankle, knee and shoulder arthroscopy and selected minor shoulder procedures; and treatment for accidents requiring urgent medical attention.
Individuals and families will join a private health fund to cover their particular needs, irrespective of what they are. But, despite these wide-ranging benefits, some families will not be able to face the increased cost of living that these changes will bring, and there is no doubt that the changes will result in greater pressure on our public hospital services.
The full effect of Labor's means-testing changes have not yet been felt, with PHIAC reporting $1.2 billion in prepayments in the June quarter as people tried to defer the resulting premium increases. Many policyholders prepaid for 12 months or more—delaying the pain of Labor's cuts. Of all Australians with private health insurance, 5.6 million have an annual household income of less than $50,000 and 3.4 million have an annual household income of less than $35,000. These are not people who can afford to have additional costs added to their bills. The changes to Lifetime Health Cover in this bill will increase premiums by up to a reported 27.5 per cent on 1 July this year.
Many people are likely to drop or downgrade their cover. Private health insurance will become expensive for people who retain their cover. A deterioration of the risk pool will cause upward pressure on premiums for all 12 million Australians with private health insurance. More people will be forced onto long public hospital waiting lists.
Public hospitals are already struggling under the $1.6 billion cut to hospital funding in Labor's MYEFO, and this will only add more pressure on administrators within those hospitals as to the decisions they will make, in terms of the access and the levels, with respect to the queuing of people for particular surgery. Even pensioners and the elderly wanting the peace of mind of private cover will not be spared from these cuts.
These cuts will put undue pressure on the public health system. More people will be forced into overstretched public hospitals. Australia relies on viable and strong public and private health systems for their health care. The coalition believes all Australians should have access to affordable health care and real choice in managing their healthcare needs. The previous coalition government's introduction of the rebates, the Medicare levy surcharge and Lifetime Health Cover saw the number of people with private health insurance increase, as I said earlier, by 75 per cent from 6.1 million to over 10.7 million.
People in my local community are already hurting. This will make it much worse. Already people in Hasluck, and likely elsewhere in Australia, are concerned about the overall cost of health care. In fact, recently released National Health Performance Authority figures have revealed that one in seven people living in Perth have put off seeing a doctor because of the cost. One constituent wrote to me expressing his concerns:
We struggle to afford our payments now on a part pension.
This constituent of mine and his wife have had private health insurance for 47 years—since they were first married. He cannot help but see the injustice that, at a time when health care is of critical importance in their lives, the government is trying to make it more and more difficult for him to continue to afford to pay.
Another of my constituents wrote to me saying:
I am finding the increases in all of the various costs which I now pay are making it considerably more difficult to budget. If I do give up my health insurance I will need to go back to a public hospital if I get sick, where the waiting lists are too long.
Another one of my constituents wrote to me saying:
I just want to register my concerns that the Gillard Government is planning to withdraw the health insurance rebate, which will mean my family will not be able to continue to afford private insurance and will therefore rely on Medicare only.
My daughter has chronic Crohn's Disease, for which she is hospitalised at least 2-3 times per year.
We are under the public health system however use our private health insurance for each hospital stay, resulting in the hospital receiving the hospital insurance value to off-set her stay, with no out of pocket expenses to us.
If we are forced to withdraw from private insurance, then this cash flow for the hospital will also be withdrawn.
Those sitting opposite claim to care for all Australians; they claim to care for the downtrodden. But what we are seeing here is those opposite taking every opportunity to walk all over Australians who are already doing it tough. We are seeing a government that is prioritising its own survival and its addiction to spending over the future of Australian families and the health of our nation.
Any changes to private health insurance premiums impacts on families considerably. I have talked to many constituents when I have been doorknocking and it is a concern that they raise regularly, expressing their disappointment that the government has taken away the opportunity for them to be fully fledged members of a fund that gives them so many options. The point that so many of them make particular reference to is how important it is for them to have the choice of a public hospital or a private hospital; if the matter is urgent, then they have the opportunity of having that addressed much sooner than having to sit and wait in elective surgery lists. Their access to professional care seems to be much more expedient. The loss of that will mean that we will see some making decisions in which they do not access healthcare frequently or earlier, thereby compounding the health problem they have and creating a higher cost, in the end, to both the Commonwealth and the state in the use of hospitalisation processes in order for their illnesses to be treated.
I thank you, Deputy Speaker, for the opportunity to speak on the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012.