Alison Penfold (Lyne, National Party) Share this | Hansard source

I, too, believe that health care should be universally available. The services of the government should be universally available to all Australians. But I've stood up in this parliament numerous times asking for an urgent care clinic in Taree, a community that was smashed in May last year by a one-in-500-year flood. What response have I got? I've written five times to the minister. Do you think he's responded to me once? I've even written to the minister to request a meeting. I'm trying to work cooperatively on this very important issue—one I agree with the government on—and the minister has said: 'No. I won't meet with you.'

I'm flabbergasted that the member who just spoke said there's going to be an urgent care clinic within 20 minutes of every Australian. I don't think the member for Durack would have an urgent care clinic within 20 minutes of all of her constituents, and I know there's not one federally funded urgent care clinic between Coffs Harbour and Newcastle—not one.

Let me come to this bill, the Health Legislation Amendment (Improving Choice and Transparency for Private Health Consumers) Bill 2026. I welcome the opportunity to speak on this bill and support its intentions. The bill will allow for Medicare, hospital and insurer billing data already collected by the government—including what individual specialists charge for particular medical services—to be published on the Commonwealth's publicly accessible Medical Costs Finder website. People will be able to compare those costs against the fees charged by other medical practitioners, ultimately helping people make informed decisions about their health care. Greater transparency in healthcare pricing, which this bill seeks to achieve, is a good thing.

This bill will also amend the Private Health Insurance Act 2007 to require insurers to seek the Minister for Health and Ageing's approval of the premiums they intend to charge on new health insurance products. This is important because it will help tackle a shady tactic widely utilised by private health companies, referred to as 'product phoenixing'. As it stands, private health insurers can open a new health insurance product at any time at any premium without the health minister's approval. This is different from the process for changing the premiums of existing products, where insurers must seek the minister's approval first. This difference has led to the practice of insurers closing a health insurance product and opening a similar new product at a much higher price. Product phoenixing tends to result in consumers paying higher prices for health insurance or receiving lower levels of value or coverage. Putting a stop to product phoenixing and formalising ministerial oversight of premium setting for private health insurance products is a necessary move.

However, there is more—much more—that needs to be done when it comes to reforming the private health insurance industry. The record profit take and exorbitant management fees charged by insurers continues unabated. While Australians with private health insurance are forced to foot record premiums in a cost-of-living crisis and are consequently experiencing the largest downturn in living standards in the developed world, the private insurers' profits are reaching new heights. In 2024-25 alone, industry heavyweights Bupa and Medibank saw profits explode. Bupa saw its after-tax profits soar by a staggering $182.1 million to $593.9 million last year. Medibank's after-tax profit grew by $21.7 million to bank $573.7 million. This bill does absolutely nothing to address that. Instead, with the minister's approval, private health insurance premiums will rise at their fastest rate in almost a decade after the federal government approved a 4.41 per cent average increase from April. Even though private health insurance companies must receive ministerial approval to increase their premiums, Minister Butler did not reject their proposed price hike. Instead, he consented to it and has since defended the above-inflation rise, the largest increase since 2017. In doing so, he has forsaken the interests of Australians in favour of the profit of private corporations.

A family from Lorne emailed me to convey their outrage over the minister's approval:

We are appalled at this current situation—

under Labor's administration. They wrote:

We, a retired couple, whom have worked extremely long and hard (beyond retirement age) to secure a self funded retirement, so as not to burden this country or our government by asking for financial assistance, are once more targeted by this Labour Party.

We recently received an email informing us that on April 1, our private health insurance will increase by $50 a month. This is due to price increases under Labour's policies …

We feel this next increase, will drive deserving, frail and ailing older people from private health insurance and will increase a multitude of issues in our public healthcare system and their services.

Shame on you!

On top of this, whilst the private health insurance companies siphon record profits, Australians and my constituents are paying more for their private health insurance and getting less value in return. About 15 million Australians hold some level of private health insurance, and they are all seeing their premiums go up and up whilst their coverage is drastically narrowed.

Over the last five years, the health insurers have dramatically skewed their focus in favour of lesser coverage—namely, silver, bronze and basic-cover policies. A record 70 per cent of people with private hospital cover—some 8.8 million Australians—have major exclusions built into their policies. Often they are unaware of these restrictions until they are sick or injured and at their most vulnerable.

Insurers have been forcing customers away from full and comprehensive gold-level policies. As the Commonwealth Ombudsman found in 2024, health insurers have used a legislative loophole to inflate gold-level cover by 45 per cent over four years, when official average premium increases totalled 11.9 per cent over the same period. The benefit to insurers is that customers are still paying higher premiums each year, and, if they get sick or injured, there are a slew of basic treatments and care provisions they are not covered for and for which they will need to pay substantial out-of-pocket costs. This represents a massive saving for insurers.

The bill also does nothing to confront insurers who are not meeting the expected benefits ratio, or the percentage of premiums people pay each year that flows to healthcare providers. As it stands, Australia's private hospitals, including those in the Lyne electorate, face an existential crisis. Since COVID, the viability of private hospitals has seen a steep decline. This threat has now crossed a line that sees many hospitals simply unsustainable.

Predominantly funded by private health insurance, prior to COVID the benefits ratio was 90 per cent. Over the last four consecutive years, it has languished at or below 85 per cent. This is because there is no mandatory minimum benefits ratio that private health insurers must comply with. There is no mechanism to ensure premium increases are passed on to healthcare providers. Instead, the private health companies are allowed to negotiate with the private hospitals to set the benefits ratio. In reality, the five largest health insurers—Medibank, Bupa, HCF, nib and HBF—all use their market dominance to overpower hospitals and get a favourable agreement for themselves. Private insurance companies are not so much negotiating with private hospitals as coercing them. As a result, over the last several years, insurers have been keeping more of the cash generated through high premiums for themselves and paying less of it to the hospitals. Despite massive windfalls, Medibank barely shifted the dial on the benefits ratio paid to private hospitals—up just 1.3 per cent on 2024 to come in at 87.1 per cent for the year. Bupa actually went backwards, paying out even less than in 2024—down 0.45 per cent for a paltry 83.3 per cent payout ratio.

APRA data shows that, over the last four years, health insurance companies underpaid private hospitals to the tune of more than $4 billion. Over the same period, the health insurance companies recorded unprecedented profits of more than $7 billion. That has to change. Without enforceable, mandated ratios, insurers will continue to underfund the private system. After four years of insurers failing to meet their obligations to private hospitals, the federal health minister's March 2024 warning for them to dramatically improve the benefits ratio has fallen on deaf ears.

Mandating this requirement is now essential and needs to happen quickly to halt the alarming rate of private hospital closures. Some 20 private hospitals have already closed their doors entirely, while 80 services, predominantly mental health and maternity, have been permanently cancelled in the remaining hospitals, including Mayo Private Hospital in Taree. The Australian Private Hospitals Association is aware of at least nine private hospitals at imminent risk of closing, which is on top of the issues being confronted by non-APHA member Healthscope, of whose hospitals 12 are in doubt of continuing. All of this dramatically erodes the access, choice and quality that people rightly expect from the ever-increasing premiums they pay for private health care. Not only does this erode the choice, access and value of private health care; it places more pressure on an already overstretched public hospital system.

Australia's healthcare system relies heavily on Australia's 633 private hospitals and their more than 36,000 beds, so getting the private sector right is critical for our public sector. Private hospitals account for 41 per cent of all hospital admissions—some 5.14 million each year—and 70 per cent of all planned surgeries, with 1.72 million procedures last year. They also perform the majority of many complex operations. The complementary nature of Australia's hospital system—private and public together—has long been a strength, and it's why we have historically been regarded as the world's best. Private hospitals shouldering so much of the workload alleviates massive pressure on the public system, but the financial viability issues confronting all private hospitals are adding and will continue to add to those public pressures.

In Lyne, the Mayo Private Hospital employs 243 people and admits 12,201 patients, or thereabouts, each year. Forster Private Hospital employs 155 people and admits over 11,000 patients each year. If either of these facilities were to close because of private insurance companies refusing to meet prepandemic benefit payout ratios, Manning Base Hospital, the only public hospital in the Lyne electorate, would be forced to pick up the slack. My constituents and I know too well that this is simply not possible. Manning Base Hospital is not receiving its fair share of funding and resources, and the state government's latest attempt to break the back of regional health has gone so far as to downgrade the hospital and remove beds. Without an urgent care clinic for Taree, which, as I said earlier, I've repeatedly requested, and without any real progress taken by the Minns New South Wales government on the delivery of the Forster-Tuncurry urgent care clinic, secured by my colleague Tanya Thompson, and a public hospital in Forster, health in the Lyne electorate—the oldest electorate and one of the poorest—will reach unprecedented and unimaginable lows.

On another issue—in my electorate, countless constituents have contacted me about the Australian government's planned reclassification of MBS items for eye injections, from a type B to a type C procedure, for private health insurance purposes on 1 July 2026. This change will result in over 12,200 people who currently receive eye injection treatment in private hospital and day surgery settings no longer being able to use their private health insurance to pay for their treatment. Countless individuals will have to stop treatment due to the high out-of-pocket cost. As the only treatment they have access to is in a private ophthalmology clinic, patients will be at greater risk of irreversible vision loss and blindness because of this change.

John, who lives in Lakewood, has told me:

without this treatment, I will not be able to see… This is the second time I have had to complain about the way our Labor Government is treating people like myself.

Fiona from Kendall said:

I am a carer for my husband. I would not be able to afford injections if the rules change. We live in regional NSW and have no other option. If I lose my sight, I will not be able to drive. Who will look after my husband?

I cannot understand the rationale behind the government's decision to do this. It is extremely concerning, and I've written to the Minister for Health and Ageing, urging him to reconsider. Any loss of eyesight caused by this government's decision is unacceptable and, importantly, avoidable.

While I support this bill, I call on the minister to go further. Implement the necessary mechanisms to ensure health insurers pay their fair share by mandating a return to 90 per cent benefit ratios from annual premiums. I also urge the minister, for the sake of Australians, to seriously consider the need for a mandatory code of conduct in contracting between private health insurers and private hospitals.

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