Nicola Roxon (Gellibrand, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

The government is right in stating that this package of bills represents a significant change to the private health insurance policy and probably the most significant change since the introduction of its private health insurance rebate and Lifetime Health Cover scheme in 2000-01. The Private Health Insurance Bill 2006 will allow private health insurance to cover medical services provided outside hospital which either substitute for in-hospital services such as chemotherapy or dialysis provided in the home or in community settings, or services which are designed to prevent hospitalisation in the first place.

Under broader health cover, private insurance funds will be able to provide cover for many medical services provided outside of hospital for the first time. Broader health cover will also provide insurance for services designed to prevent people needing to go to hospital, including chronic disease management programs and health promotion programs. How direct this prevention will need to be to come within the package is something that is unclear from the legislation as it stands.

It is a significant change in the way that we think about health care—trying to find better ways to keep people out of hospital and manage chronic illness out of the acute sector—but it is telling that the government has only seen fit to go down this path for private insurance rather than for the entire health system. Clearly, the insurers can see that it suits their policyholders as consumers of health services to stay out of hospital if they possibly can, and it makes good economic sense for them too. Intriguingly, even though the Howard government seems to clearly recognise this for the private insurers, it does not seem to mind that the rationale that it is giving to these changes is the very rationale for Labor’s call to embark upon some wider reforms in health that it is ignoring, particularly through the state-Commonwealth divide—but more of that later.

Labor support this package of legislation as we believe it could provide significant benefits for the 44 per cent of the Australian population who currently have private health insurance. The 30 per cent private health insurance rebate has meant that the percentage of policyholders in Australia in recent years has gone up significantly—and we know that families have factored the rebate into their budget, the very family budgets that are constantly being squeezed in many directions by this government.

Labor have supported the 30 per cent rebate on private health insurance at the last two elections and will support it again at the next election. Labor accept and understand that many Australians have come to rely on this support, and we will not take it away. Nevertheless, we are pleased that this passage offers a glimmer of hope that those who do have private health insurance might be able to get better value for their money. Longer term, if it means that we manage chronic illness better and keep people from multiple readmissions to hospital then that will be desirable for the health of the nation as a whole.

However, Labor has a number of concerns about the package, which are encapsulated in the second reading amendment that has been circulated in my name. I will read the terms of it because it sets out the concerns that Labor has. I move:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading, the House notes:

(1)

that while the expansion of private health insurance to coverage of services provided outside of hospital will have benefits for the 44% of Australians who have private health insurance, it will not provide access to the same kinds of services to the majority of Australians who don’t have private health insurance;

(2)

the expansion of private health insurance to cover a broader range of services will likely lead to further increases in private health insurance premiums;

(3)

the bill pays scant attention to safety and quality issues for services provided under the rubric of Broader Health Cover;

(4)

the bill does not include sufficient protections for the freedom of doctors to make clinical decisions about the treatment/s that will be in the best interests of their patients in relation to services provided under the rubric of Broader Health Cover; and

(5)

the $50 million the Howard Government provided to the private health insurance industry in the last budget to advertise their products is a waste of taxpayers’ money and an appalling use of scarce health resources”.

The House will note that Labor’s main concern is not primarily about the content of the package but about what happens to those who are not insured and therefore not covered at all by these changes. The expansion of private insurance to out-of-hospital services will mean a shift in the balance between services previously funded predominantly through hospitals or Medicare and those services able to be funded through private health insurance. The shift raises equity issues around access to services equivalent to those under the broader health cover changes but for people who do not have insurance. Undoubtedly, people who do not have insurance even after these changes will be able to continue to access services such as chemotherapy and dialysis through the public system in hospitals. But the privately insured will have options that may well not just become a choice, for example, of a more comfortable venue or a particular doctor but have significant health impacts, especially if they have better access to preventative and chronic disease management programs. The argument can then be made that they may have access to a better overall quality of health care than those who are not insured.

The logical extreme, if we take it to the extreme of this argument, is that people who cannot afford private health insurance may be more likely to end up in hospital because, unlike those with private insurance, they might not be able to access programs which could prevent them from having to go to hospital in the first place. It is this element of the package which I think the House would be able to understand that Labor is most concerned about, for very obvious reasons. We believe it represents a departure from the current balance between public and privately financed services where the rationale for private health insurance and the government’s particularly publicly stated rationale is that it gives private health insurance consumers additional choice. Without attention to and change in other areas outside the health insurance area, universality as a core part of our system could be threatened. Of course, not surprisingly, the government rails against any suggestion that this package represents a shift towards a two-tiered system of health care. But if the broader health cover provisions give people with private health insurance access to services and treatment options which people without private health insurance may not have access to then the package will be doing exactly that.

As I have mentioned already, we will support this package because we want those with insurance to get any improved benefits that they can. We support them getting value for money for their premiums, which are always going up. We expect that it will have significant benefits for private health consumers. In particular, we believe that it could lead to important innovations in care and services provided outside the hospital gate. However, having introduced these changes for people with private health insurance, we urge the Howard government to work towards addressing access to these kinds of services for the uninsured.

There are other parts of this government package that Labor is critical of as well. As I said, we are absolutely appalled about the $50 million that was included in the last budget for the private health insurance industry to advertise its products. This is a disgraceful waste of taxpayers’ money and of scarce health resources. These are private businesses who can easily advertise their own products, and $50 million is not an insubstantial amount of money. For example, it could provide relief to struggling families under pressure of increased healthcare costs. We have seen today yet another example of costs that are constantly putting ordinary working families under pressure. The cost of living is going up in so many ways. We now see that the cost of medications is going up. Patients are now paying hundreds of dollars extra to get some very common medications. That burden could be eased by the $50 million. The $50 million could also pay for 1½ million GP consultations. The $50 million could help fund potentially life-saving research into any number of preventable diseases and it could fund a whole series of public awareness campaigns on important health problems such as obesity and diabetes. It should not be used just to line the pockets of private health insurance companies.

Yet, while the government is happy for the money to go to the insurance companies for this advertising campaign, it seems a lot less concerned about the hip pockets of private health insurance consumers. For example, the government insists that this package will not have any impact on premiums. In fact, in his second reading speech, the health minister went as far as to argue that some of the changes in the bill will actually reduce pressure on premiums. The last time the government said that one of its policies would reduce pressure on private health insurance premiums was in 2000-01. Since then there has been over a 40 per cent increase. That is one hell of a broken promise on not affecting premiums.

Between 1998 and 2006 the cost of private health insurance increased twice as fast as general inflation. The fact is that the government cannot be trusted on private health insurance premiums. Given this track record, why should we believe anything Minister Abbott says about what this package will do to private health insurance premiums? Is it not counterintuitive, even at a basic level, that expanding the services offered will, in the first instance, actually reduce premiums? If we really manage people’s care well and if the innovation that is promised does ultimately deliver in the future, there may well be decent long-term savings and they might be significant. The insurers no doubt have this in mind in wanting to go down this path. But in the short term it will not have this impact, and in the long term there are no guarantees—certainly none in this legislation—that any savings will be passed on to consumers.

Labor does not believe Minister Abbott’s predictions at all and is concerned that this expansion of services will lead to further increases in private health insurance premiums. Further, the government says the private health insurers will benefit from the regulatory changes included in this package. This may be true, but, according to the government’s own explanatory memorandum, the cost to funds of complying with the current regulatory regime is only around one per cent of total benefits paid. So, even if this figure falls below the one per cent, as the explanatory memorandum notes it might as a result of the changes in this package, this is so small that it is hardly likely to lead to significant downward pressure on premiums.

Further, despite the minister’s rhetoric about wanting to protect consumers by retaining his role in reviewing premium increases, this bill actually weakens the existing legislative framework in this regard. Under the National Health Act currently, one of the objectives of the Private Health Insurance Administration Council is to minimise premium levels. However, in the Private Health Insurance Bill that we are debating, this objective has been removed from PHIAC’s remit. One does have to question how serious the government is about keeping premiums down if it is not prepared to include these kinds of consumer protections in the bill. It is not as if we are suggesting a new protection here; this has actually been removed from the existing objectives that set out what it is that the Private Health Insurance Administration Council has some responsibility for. Labor will be moving to address this issue during the third reading debate. It is very clear to us that wherever possible we should do all that we can, and the government should do all that they can, to minimise the premiums that ordinary Australians need to pay.

The government do not have a good track record on health costs. I have already mentioned today the issue of medication costs—what has got out of control on the PBS on the government’s watch, even though the government promised that their changes would keep these very sorts of increases under control. We have heard recently, for example, about how the Medicare levy surcharge, originally meant to apply to wealthy Australians who did not take out private health insurance, now hits many people below the average wage. Why is this? There is good news that the average wage has risen, but the government has refused to recognise this and has refused to index the threshold. So more than 280,000 taxpayers were slugged with this surcharge in 2003-04. Instead of it being something that is targeted at the wealthy, as the minister at the time promised, it is now the case that those who have less than average incomes are forced to pay this levy. Private health insurance premiums are also at risk of rising even further if Medibank Private is sold, which is precisely what will happen if the Howard government is re-elected later this year.

I would like to turn now to a number of specific issues relating to the package and note that the inquiry by the Senate committee that is reviewing this package of bills is still under way and is not due to report until 26 February. Given the complexity of the package, Labor will reserve its options in the other place to move further amendments if other issues are flagged by the committee as needing attention.

We have particular concern about the quality and standards issues. We are concerned that the bill pays scant attention to the standards and qualities of services which will be provided under the rubric of broader health cover and outside hospitals. It is easy for the public to understand that, if services are going to be provided outside hospitals, we need to ensure that consumers get the protection of strong and appropriate standards. The legislation does not provide for any quality assurance mechanisms for broader health cover products to take effect until July 2008. In other words, there will be a 15-month time lag between the implementation of the cover in April 2007 and the implementation of standards and quality provisions that will apply to those who are actually going to be providing the services to consumers. Obviously, we believe that this represents a completely unacceptable risk to consumers of private health insurance, and we will move an amendment during the consideration in detail stage to address this issue.

Another issue is that of clinical autonomy for doctors. Labor shares the concern of interest groups such as the AMA about the lack of sufficient safeguards in this bill for doctors to expressly continue to make clinical decisions about the best interests of their patients. Various groups have raised concerns about this package. Some have said that it runs the risk of being a move towards managed care—in other words, a system whereby the private health insurer assumes responsibility for the health care of its members; for example, through direct contracting arrangements with doctors and other providers. To assure the public and the Labor Party that this is not the intention of this bill, it is important to specifically have a provision which protects the clinical freedom of doctors—whether it is from the health funds, any other groups or governments. It will always be a matter for doctors to determine the best course of treatment for their patients. The fact that doctors are able to determine the best course of treatment for their patients is a fundamental part of our health system, and we think it needs to be protected explicitly. Labor will move an amendment to strengthen the bill’s protections on doctors’ clinical freedoms.

There are a number of other less significant but still important parts of the package that I want to mention briefly before concluding. In addition to the introduction of broader health cover, the bill contains two other policy changes of note. The first is an introduction of a requirement that private health insurance funds produce standard product information on their private health insurance products. This requirement is very sensible. It is designed to make it easier for consumers to compare different private health insurance products and understand what their entitlements would be. Labor strongly supports the introduction of these requirements as they will be of significant benefit—and, I might say, probably be of significant relief—to many consumers who have tried to find their way through the myriad packages on offer. The bill will also introduce a change to the Lifetime Health Cover scheme whereby people who have retained their private health insurance for over 10 years will no longer be subjected to the Lifetime Health Cover loadings on their premium even if they took out insurance after they turned 31. Obviously this will be welcomed by those who qualify for that, and Labor supports this change.

There are also a number of regulatory changes in this package. The bill will streamline the private health insurance legislative framework by bringing the main components of the existing legislative framework for the new policy proposed by the package under one act. Labor supports these changes. The package will also introduce a change to the risk equalisation or reinsurance arrangements. Labor supports a change in this area as it will result in a better distribution of the overall insurance risk than the current formula and so it is an improvement on the current arrangements. But I have to say that we are somewhat surprised that the government has chosen to adopt this particular model in the legislation when it clearly was not the government’s preference.

The explanatory memorandum itself—I think for the first time since I have been here—expressly says that the government would have preferred a different model, the capitation model, as it believes that this would have been, and I quote, ‘the best strategic option for the longer term’. Instead it has opted for a different model: the model that the industry says is the best one. There may well be good reasons for that. I am sure the government were convinced that there were good economic reasons for so doing, but it seems to me very strange that the government are prepared to say, ‘We actually prefer this. We think it is a better model. We think it will make our system sustainable,’ and then opt for something else. It might be a difficult decision for the minister or the government to make. But, if there is a clear option which the government are convinced is one that is actually going to make our health system more sustainable in the future, why haven’t they had the guts to pursue it here?

I think some of the technical parts of this package will be scrutinised more closely in the Senate committee that is currently under way, and obviously we will keep an open mind about those issues if the committee makes recommendations in that area. As I said, I do think it is very strange to not have the government pursuing the option that they have identified as the best one. There has not really been an adequate explanation for that given by the government so far other than that the industry prefers something else. We are fairly confident that the industry generally is very supportive of this package, and the government has made it quite clear that it has worked very closely with them. However, we still have a responsibility to make sure that whatever we do is sustainable for the future, and this seems to be one area where maybe the government have just opted for an easier option. They have not put on the record that this is a transitional step to something else. Obviously we look forward to any comments that the minister might be able to make to enlighten us as to why this option has been pursued.

Overall I think I have made our position clear. I will conclude here by saying that Labor support the package. We think it is important that a range of health decisions start being made that focus on prevention measures and keeping people out of hospital. We know that it is much more desirable, where decent services can be provided, not to have to have people in hospital. Of course there will still be many times where people do need to go into hospital. But Labor are concerned about the equity impact of this package. We want to make sure that those who are not insured still get the best quality services as well. Private health insurance should be able to provide people with choice and different options, but not a whole range of different health services that are not available to others. That is the great undone work of this package that we will be pursuing the government on, and we expect to see some action in this other area if they want to pursue these changes in the private health area.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Is the amendment seconded?

Laurie Ferguson (Reid, Australian Labor Party, Shadow Minister for Multicultural Affairs, Urban Development and Consumer Affairs) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

I am pleased to be able to stand in the House today to support the Private Health Insurance Bill 2006 and to oppose the amendments moved by the member for Gellibrand. The best guarantee of health care for Australians is a healthy private health sector, because if people have private health insurance and are able to access private hospital facilities then it means that fewer people will be seeking to access public hospitals and there will be better health treatment opportunities for everyone. The situation which existed under the former government was that people were simply unable to afford health cover. People were dropping out of health cover at a record rate and the private health insurance system was close to collapse. If the private health insurance system is not healthy then you find that the demands on the public health system become completely overwhelming.

Madam Deputy Speaker Bishop, you would know from your own experience in the area of health in the parliament and in the community that Labor Party governments at the state level throughout Australia have failed dismally in providing the healthcare treatments that indeed they should to the Australian community. In my home state of Queensland we had a horrendous situation at Bundaberg Hospital. Wherever you go, you find that public hospital waiting lists are far too long. Despite the fact that the states have access to every last cent of the GST, the states are simply not meeting their healthcare obligations to the Australian community.

It is particularly good to see that around 44 per cent of Australian residents now have private health cover. That is up from a very low figure which occurred in the dying days of the Keating Labor government. This means that some nine million Australians are able to access the private health system because they have private health insurance. This significant level of membership also helps to relieve the demands on Australia’s public hospitals. Membership of health funds enables members to have greater choice and flexibility. I have to say that history will record that one of the most effective areas of this government over the last 10 years has been in the ability to make it possible for more Australians to be able to take out private health insurance.

The Australian government is well aware that health funds need to be as flexible as they can be to provide the most efficient services needed by their members. I think everyone would agree—in fact, it is a no-brainer—that it would be remiss of government to introduce stifling regulations that encumber the business efficiencies of health insurers. Equally, of course, it is important to make sure that the rights of members of health funds are properly safeguarded, including the right to quality service and value for money.

This bill and related bills introduce changes that will help improve the flexibility of funds and services but they will also introduce some additional responsibilities of funds to their members. The most significant change outlined in these bills is the introduction into legislation of the concept of ‘broader health cover’. This is the concept of the provision of some health services and treatments outside the rooms of a hospital or medical centre. These sorts of treatments encompass a whole range of areas, including treatments that can be delivered in a home environment and treatments that are not necessarily required to be carried out within the environment of a hospital. Some examples—this is not an exclusive list—may include some cancer treatments, such as chemotherapy; dialysis; post-operative and post-discharge care; and nursing assistance.

The bills currently before the chamber will mean that hospital cover, as a type of service provided by health insurers, will now also extend to treatments that can be delivered out of hospital. This development will greatly increase the flexibility and treatment options for health fund members. It is also cost-effective—if the hospital facilities do not have to be accessed and these treatments can be carried out at home it must therefore be cheaper and it means that the health dollar will go a lot further.

The bills before the House are a very sensible range of amendments that will bring greater flexibility to the provision of health services and in doing so will reduce some treatment overheads. Most importantly, these bills will ensure that the quality of service to Australians is not reduced. These developments will enable health funds to supply services that will help to sustain their members’ health and reduce the possibilities of certain illnesses, through specific preventative services such as exercise programs, healthy diet programs and programs to help smokers to quit the habit.

These changes result from the needs and demands of health patients in what is an ever-changing world. Such flexibility was never envisaged in years gone past, when health services were almost entirely delivered in the hospital. Many people these days go to day treatment centres—they are treated and then allowed to go home, whereas often in the past these procedures would require that people remain admitted to hospital for a considerable period of time.

Today, it really is common for patients to desire greater flexibility in treatments and service delivery, and it is important that people have choice in this area. Many people prefer to go home, where they are in their own environment and surrounded by their family and friends. Often the environment of recuperating at home can be so much more conducive to a fast recovery than maybe the sterile surroundings of many hospitals.

In addition, under these bills, members who maintain their membership of a health fund over a continuous 10-year period will have the added benefit of no longer being subject to the Lifetime Health Cover penalties. This change is designed to not only reward those people who have made the decision to remain members of health funds for the long term, which overall assists the provision of health services in Australia, but also encourage others to do the same. The prospect of health cover becoming better value for money after a certain period of time is an attractive thing. It is expected that removing Lifetime Health Cover penalties will encourage new members to consider long-term membership.

The bills will also introduce requirements of health funds to supply improved and more-detailed information to potential customers and members. I think it really is important that, when a person makes the important decision to join a health fund, all of the terms and conditions and the facts are known to the prospective member. This will enable members to compare services and costs amongst the various private health insurance funds. That will assist individuals to make a choice as to which is the most appropriate fund offering the most appropriate fees and services to suit the individual’s needs. The documentation must include entitlements, policies and, as I have already mentioned, costs. This safeguard will offer significant protection to the consumer and ensure that customers are clearly advised of the services they can and cannot expect. This means that people will be in a much better position to make an informed choice.

The second significant feature of these bills is the introduction of new regulatory protections. Those funds that breach the new guidelines face appropriate penalties. Whereas in the past the firms themselves were regulated, these bills bring in regulations instead for services. It is a sensible shift in that it will encourage newcomers to the industry, a move that will have the obvious service and cost benefits, but it will also reduce the problems associated with firms having to comply with compulsory regulations. In fact, there are some 48 regulations currently. If a health fund falls down on just one of these regulations then they fail full-stop. This is a difficult set up, and these bills will address that problem.

Another significant purpose of the bills is that they introduce guidelines for the establishment of new funds, mergers, and the closing down and operation of funds. Included amongst the guidelines will be rules to cover the assets of health funds. These can only be used to meet liabilities that arise in the normal course of business.

These bills are significant. They will bring about the most substantial improvement in some five decades in the health fund regime. The bills are very sensible legislation. It is necessary to note that the government has also said that the legislation will be reviewed in coming years to analyse whether further changes are needed to ensure the best possible continued outcomes for both consumers and industry. At a time when Australians are living much longer than they traditionally have, it is important that the new health services available are affordable to Australians. That is why it is important that private health insurance be alive and healthy, and I am particularly pleased to commend this brace of bills to the chamber.

Michael Hatton (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

This is a very significant combination of bills. As the previous speaker, Mr Slipper, and others have indicated, here we are dealing with a colloquium of bills, seven in all. Of course, the largest and most important bill, the Private Health Insurance Bill 2006, was introduced, I think, on the last day of sitting, 12 December 2006. It makes a significant number of changes. In particular, the extension of what is coverable by this legislation is the foundation of it. There is a broadening of the range of services which can be covered by private health insurance. They include out-of-hospital services that are a substitute for or prevent hospital care. This is fundamentally important. When Labor were in government we understood this type of approach in the aged care area. This is why Labor, year on year, extended its hostel program by 15 per cent. This is why we concentrated our funds, not where they had been previously—that is, in the nursing home area—but on the 96 per cent of people who were still in their own homes and who did not need to receive that level of care.

Labor provided an interim step with hostels, but we also recognised that immense savings could be made not only to the Commonwealth but also in terms of people’s quality of life if we could deal with people in situ at home by taking services out to them. The modality of this first intent with respect to private health insurance is to do the same sort of thing: recognise the dynamic change within the community in terms of dealing with people. Australia wide, it is hard enough to get a bed in a hospital; it is very difficult to actually stay in a bed these days because they have you out on your feet and into the general community as quickly as possible.

The fact that the length of stay in hospital has been shortened is also a reflection of the dramatic changes in medical technology and techniques—for example, a hip operation. The member for Dobell has just been through that process, and I am glad to see him back in the House well and recovered. If he had undergone that operation 10 years ago, he would have ended up with a very long scar of 20 or 30 centimetres. These days, leading exponents in surgery have a minimalist and less invasive approach. Because there is a smaller scar, there is less disturbance. They also use a computer in order to put a prosthesis in. A section of these bills actually deals with prostheses, and I will come to that later. The surgeons are able to site the area more accurately than in the past.

This combination of a range of different technologies, new approaches and an attempt to use a keyhole method with regard to this quite difficult surgery means two critical things: (1) there is a pretty dramatic reduction in healthcare costs because the length of stay in hospital is shorter; and, (2) the length of the voluntary stay within a rehabilitation hospital can also be shorter because there is less impact on the major muscle groups. Of course, there is also a commensurate saving: getting over the operation is quicker, and that is important for the patient. This is a very good and a very sensible measure because it is reflective of the dynamism of those changes. We know that flexibility has to be at the core of so much of what we at the federal government level do, because we are dealing with a dynamic area.

Anyone with experience, like you, Madam Deputy Speaker Bishop, in the aged care area, would appreciate that a number of the elements of this bill are fundamentally critical. For me, as a baby boomer, they will continue to be fundamentally critical. Given that we are the most difficult cohort that this Commonwealth has had to deal with, we will double the size of the aged cohort from about 12½ per cent to 25 per cent of the population. That will no doubt be the case if we are, as we have been in the past, loud, demanding, insistent and without the reticence, the forbearance or the willingness our parents had to go without in order to give to us. If that is the case and there are greater demands and more expectations on our health care, a dynamic change also has to be taken account of within the parameters of these bills and Australian health generally—that is, the increased life expectation has dramatically changed the profile of our health system. We know that, so far, we have succeeded in keeping about 96 per cent of people at home and have been able to deal with them at home by providing intensive services and out-of-hospital services. This is directly affected by the bill and that is why I welcome it.

There will be more of that in the future because of people’s increased longevity and the capacity of the health system to keep people alive who otherwise would not have survived, through a pharmacological approach and the availability of very sophisticated drugs, the combination of different drug therapies or an attack on the major causes of mortality in that age group. Or an effectively prophylactic approach could be taken, based on the notion that we should be concentrating a lot more on keeping people healthier and fitter, whatever their body size and shape; that we should be doing more to aid our own good health and assist the community generally; and that we should do good things such as giving up smoking, like I did about five years ago now. I wish I had never started in the first place. It is a great cost to the country and it is a great cost to the individual who is shackled to that dreadful addiction. One of the fundamental things we can do with an ageing population to cut mortality from lung cancer and from other associated cancer is (1) knock off the smoking and (2) increase the exercise. For people to do that they need mobility, as the member for Dobell found out.

There are more people now, at a younger age, who are finding themselves up for something dealt with in one of the other bills that we have got here: prostheses. I have an interest in literature—I was an English history teacher—and about the most I knew about prostheses, I think, apart from the fact that it was an unusual word that you could use in spelling contests, was from My Brother Jack, when David and Jack’s father returned from the First World War. He had been injured, and he had a prosthesis. That was a dominant thing in their early childhood. I suppose the other one was very early: ‘Tin legs’ Bader, and his problems with learning to use his tin legs. They were a very primitive kind of prosthesis.

What is most interesting about this is that as the population ages but also as the profiles change—as the capacities and technologies change—we can do what we could not do before, because of those different technical approaches. But we are also in a position to do it at different ages. That has a cost but also a benefit, or a series of costs and a series of benefits, to the community at large. An example of that is someone like Kenny Ticehurst, the member for Dobell, having his operation. I am about to get the needle to go a few months more before I will inevitably have a hip operation, at the very young age of 55. But at least it explains a series of problems I have had and have tried to address over a 10-year period or so. There is some certainty, at least.

But it is also an indication that if you look not only at me and Ken but worldwide—Jimmy Connors has just had a double hip operation, I think, in two goes, and George Bush Sr has had it—people are having it at a relatively younger age. Some of that, of course, is because of direct injury. For the rest of it there are genetic factors and so on, affecting the breakdown of the cushioning material. But this brings me up against something as well, and it is one of those marvellous things in life. I never thought I would need to know anything about prostheses at all, but thankfully other people do. It is a case of how dependent we are on others in general, and also how dependent we are, directly within the health system, on the training, expertise and capacity of others. But it is also the fact that what we do at the government level—those things that we think we will never have to deal with at all—can come crashing very close to us. It is then that you realise the importance of the maintenance of the arrangements of things that you never thought would impinge on you or on others, and of ensuring that we have a proper, well-regulated and efficient approach to these things. Those elements are important.

The other key purposes of the principle bill are: the removal of the Lifetime Health Cover loadings for members with 10 years continuous service, which is fine; the requirements on insurers to provide standard information statements for consumers about their private health insurance products; and a clarified and simplified legislation. All of those things are good.

The fundamental problem for a lot of my constituents has been partly addressed in the rise of some of the larger organisations that have operated in the hospital system—for instance, within Mayne Health when it arose and took over a series of private hospitals and so on. There was a direct impact. Because of the understandings and agreements between the surgeons and the other people in the hospitals—the ancillary services, anaesthetists and so on—it was possible for the first time to get a package of charges and for that to be fundamentally covered under Medicare combined with some private health insurance to cover the other elements. People could walk into a hospital, have their elective surgery and walk out without having busted their pockets, because they had chosen to have elective surgery and chosen, because of their particular circumstances way back—or the prospect of the circumstances—to buy private health insurance.

One of my constituents is now struggling with the effects of Parkinson’s disease, which is a very difficult thing to deal with. We have better control than we had in the past, but the ravages of that disease are evident in the greatest fighter the planet has ever seen, Cassius Clay, who changed his name to Muhammad Ali. A constituent of mine, Cec Moore, had a heart operation. He was privately covered. He went in and had the job done and, despite being on the highest level of private cover, came out with a $4,000 impost on himself. This was about 10 years ago or so. The deficiency in the system there was apparent. At that stage you had people who would not pay into any cover at all; they would just rely on the Commonwealth to do it through Medicare. Throughout long periods in their lives, people had put into private health cover and therefore should have had cover themselves and the community should have had cover. But at the end of that it was pretty tough to whack them with a bill that was very big for someone on the pension.

There are so many pensioners who have maintained private health cover. The arrangements that have been put in place by the larger providers, such as Mayne when it was central to the whole show, are very welcome. It is the sort of thing we need to make the system more workable, make it fairer for people and make it fairer for those people who go the extra yard and lessen the burden on the general community by providing for themselves.

I would like to come to the opposition’s amendments and, in doing so, commend the shadow minister for the comprehensive way in which she dealt with this bill today and the sensible argument that she put forward—a recognition of the breadth and importance of what is covered here. She reiterated Labor’s approach with regard to the 30 per cent rebate. Like it or not—we supported it at the last two elections and we will do so at the next—the world has changed.

We need to manage the whole of this, but in dealing with the whole of it it is important that we look at what the deficiencies are, from our point of view in opposition, and what our intentions are so that they are known to people when we come to government. The first item in the amendment is:

... while the expansion of private health insurance to coverage of services provided outside of hospital will have benefits for the 44 % of Australians who have private health insurance, it will not provide access to the same kinds of services to the majority of Australians who don’t have private health insurance.

You could reply and say: ‘That is gainsaying. If they do not have private health insurance then they are not in it—that 56 per cent are out.’ But, if you have a problem there, maybe you have a problem in the broader community. We need other mechanisms to operate there as well because there are the same kinds of problems for those people and there are imposts on people who generally do not have a great capacity to pay for them. That is what modern societies are about: spreading the risk and spreading health coverage to include everyone.

The second item out of the five amendments is:

... the expansion of private health insurance to cover a broader range of services will likely lead to further increases in private health insurance premiums.

That is a simple and straightforward statement. One could argue that if you could entirely trust the Minister for Health and Ageing with regard to his prognostications on health insurance premiums you could have absolute faith that this would not be a problem but—sad to say and, going from past experience, time and time again—that is the last thing one could say.

This is a fundamental concern. We were promised previously that there would be reductions and that the increasing charges would be held back significantly. That has not happened, and with the impending sale of Medibank Private, the prospect of the 37 or so private organisations out there increasing their charges, and not being brought to book and reigned in on this, is great. We need more than assurances which prove hollow from the minister.

The third item is:

... that the Bill pays scant attention to safety and quality issues for services provided under the rubric of Broader Health Cover.

That amendment speaks for itself. The fourth is:

... that the Bill does not include sufficient protections for the freedom of doctors to make clinical decisions about the treatment/s that will be in the best interests of their patients in relation to services provided under the rubric of Broader Health Cover.

This has been substantially dealt with in the shadow minister’s contribution. The last point goes to a criticism in relation to the wastage of money on advertising. It is:

... that the $50 million the Howard Government provided to the private health insurance industry in the last budget to advertise their products is a wastage of taxpayers’ money and an appalling use of scarce health resources.

I could not but agree. The pockets of the private health insurance industry are very deep. They can provide for their own publications. They can provide for their own marketing and advertising. This is yet another example of a government that has an enormous amount of largesse. The government uses its own departments or outsourced organisations to spread propaganda messages. There is a fear about a third party or closely associated set of third parties where, effectively, they do the advertising on the part of the government in relation to the benefits they have gained from everyone at large. It is not right. It should not be condoned; it should be condemned, and I do so, along with all of my colleagues.

I just want to make a passing observation. This is my fourth speech today. That is not bad at 1.30, before question time! I am struck, time and time again, when I am in the chair or at the speakers rostrum, by how few government members are willing to get up and defend what their government does. They are lax and lazy in government.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

I suggest the honourable member return to the subject of the bill.

Michael Hatton (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

Madam Deputy Speaker, if you want me to I will return to why many government members are not speaking on the Private Health Insurance Bill 2006 and are not supporting the government’s substantial legislation in this regard. It is an observation that goes to whether or not this government and its members are committed to supporting the legislation.

With regard to legislation after legislation that I have dealt with, it is the Labor Party people who keep the argument going and who do the debating in this chamber. We keep the parliament alive and we have demonstrated, on this bill and on others, that we are willing to take up the nitty-gritty of these subjects and to debate them—and to do it at length and do it well. The government is sitting on its hands. You cannot just rely on ministers, parliamentary secretaries and a couple of other people to front up and give it a tick. This has to be worked at. It is a demonstration that this government is out of puff. Despite the fact of some of the good work—like this—that has been done in this area by the people in the departments, this government is out of puff. (Time expired)

Sophie Mirabella (Indi, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Private Health Insurance Bill 2006 and cognate legislation being debated today. I am pleased to speak in support of the principal bill and to oppose the amendment moved by the member for Gellibrand. This bill is designed to make a strong private health insurance sector even stronger, relieving pressure on the public system and giving patients more choice. This government believes in choice. We know that members opposite do not believe in choice, particularly if that choice interferes with their rigid adherence to ideology. They certainly do not believe in choice when it comes to private health insurance and the government’s 30 per cent rebate policy.

Recent Labor Party history is littered with examples of the hatred of the government’s approach to private health insurance—an approach that has seen the incidence of private health cover reach more than 43 per cent, after falling as low as 30 per cent under the previous Labor government. Successive Labor Party health spokesmen and spokeswomen have made all sorts of alarmist comments about the 30 per cent rebate, which is the cornerstone policy of making private health cover more affordable and achievable for Australian individuals and families.

The Private Health Insurance Bill 2006 that we are debating today—and the cognate legislation contained in this suite of legislation on private health insurance—is a significant bill which will greatly improve the private health sector which, by the very nature of health care in this country, alleviates the many, continuing and increasing pressures on the public system. The minister has said that we have an ongoing obligation to revitalise the private health sector and adapt it to changing needs—namely, accepting changing realities in the healthcare sector that are not always primarily focused on hospital admissions. Apropos of this, when the existing regulatory regime was introduced through the National Health Act 1953, the health system was a very different system catering to very different requirements. Preventative care, extended aged care at home, home and community care, day procedures and other areas of health care that are entrenched in our current health system were more or less unheard of when the existing architecture of the regulatory regime was put in place.

These measures for private health insurance were announced by the Minister for Health and Ageing on 26 April 2006. The bills are the product of significant consultation with the industry and amend much of the legislative architecture influencing the private health industry sector, which is generally regarded as requiring significant update and replacement. The Private Health Insurance Bill 2006 will: allow insurers to offer benefits for out-of-hospital services, which will make life easier for patients through avoiding hospital costs and most likely lowering out-of-pocket costs; amend Lifetime Health Cover, namely to allow the removal of the Lifetime Health Cover loading for those who have held private health cover continuously for 10 years; require insurers to provide standard information to consumers; introduce improved safety and quality standards for insured services; and change the focus of regulation from insurance providers to insurance products.

Support for the private health insurance industry remains an article of faith for this government. We have seen private health cover increase. Even in my own electorate of Indi, some 46,000 people benefit from private health cover. So the government has the runs on the board when it comes to making our private health insurance system a success, whilst bolstering resources in the public sector and strengthening Medicare, whereby bulk-billing rates have increased significantly in recent years.

The Labor Party hate private health cover. They want to penalise people who hold it. If they ever got their hands on the government benches they would slash the 30 per cent private health insurance rebate. We just have to look at their past form on this. One former Leader of the Opposition stated that the private health insurance rebate ‘reinforced failure’. The Latham Diaries informed us that ‘the private health insurance rebate would be one of the first things abolished in any Beazley government’. The shadow health spokeswoman at the time, the member for Jagajaga, reportedly said that the Labor Party ‘despises the rebate and wants to poleaxe it’. Another former Leader of the Opposition, the former member for Werriwa, called the rebate ‘an appalling piece of public policy’ and ‘the maddest piece of public policy that one will ever see out of the Commonwealth parliament’.

Then there was the member for Perth—another former health spokesman—who said that the private health insurance rebate was ‘a public policy crime’. The member for Lalor kept us guessing for over a year when she was shadow health spokesperson, but then she begrudgingly said that Labor would keep the rebate. But that was all she said. At the same time, she spruiked the benefits of Medicare Gold—the policy that Barry Jones described as ‘a turkey’ and that Peter Botsman eloquently described as ‘a policy that had the body of a wombat and the head of a donkey’. We have seen the new shadow minister, the member for Gellibrand, reiterate Labor’s approach to continue to adhere to Medicare Gold when she said in a recent interview about Medicare Gold:

... I think that there are some components of it that are really important for us to consider in any rethink about the health system.

The member for Blaxland, who has just spoken on this bill, accused government members of not getting up to support government policy. I have not seen too many members of the opposition getting up and supporting the turkey that is Medicare Gold. Perhaps when they do support this absolutely pathetic excuse that passes for a policy he might then have the right to accuse members on this side of not supporting this government’s policy, which is totally false. Let us not forget that behind Medicare Gold was Labor’s rationale to cull the government’s 30 per cent private health insurance rebate, because the then Leader of the Opposition said in his diaries that Medicare Gold was ‘my plan for killing the private health insurance rebate’. That policy lives on in the veins and beats in the hearts of members of the opposition. The reality is that private health insurance does play a pivotal role in the Australian health system, a basic fact understood and lived on a day-to-day basis by so many Australians but so poorly appreciated by the opposition.

When the Labor Party was last voted out of office, the number of Australians holding private health cover dropped to as low as 30 per cent. Labor Party icon, Graham Richardson, a former health minister, even stated that, for Medicare to survive, the number of Australians with private health cover had to remain above 40 per cent. We know that members opposite—on their past form and on their recent statements—cannot stand the private health insurance sector. But in this instance they should look at reality and at the interests of Australian families and the Australian health system. They should vote with government members in commending these bills to the House, as they are significant pieces of legislation designed to make a strong private health sector even stronger.

The measures we debate today will come into force on 1 April 2007 and they will mean that we will have improved access and services for all Australian consumers and even greater choice and competition in the market. The changes will also translate to a simpler and more effective regulatory regime for the insurers and for the providers. For those reasons I commend the bills to the House.

Justine Elliot (Richmond, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Private Health Insurance Bill 2006. As has been stated before, federal Labor supports this package of private health insurance legislation and I certainly support the amendments moved by the member for Gellibrand. While some of these changes are sensible, if indeed long overdue, there are certainly some items of concern relating to the potential increases in private health insurance premiums and the impact they will have on families who have private health insurance cover. There are major concerns about the potential for this legislation to create a very distinct two-tiered health system. This certainly is a concern for many people in my electorate of Richmond who are already having difficulty accessing health services. There are also many concerns about this being a wasted opportunity, as this bill does nothing to address some very real issues that consumers have in relation to private health insurance.

Arguably, the expansion of private health insurance to medical services provided outside hospital is the most significant policy change contained in the package. These changes should allow private health insurance funds to provide coverage for medical treatment in a way that reflects modern clinical practice. This is good news for private health insurance clients who may undertake dialysis or chemotherapy, as there are now provisions for these services to be covered when provided in more comfortable surroundings. It will also give private health insurance holders access to chronic illness management which is not available through Medicare. This makes good fiscal sense. As we all know, prevention is better and cheaper than cure. However, it begs the question: what about access for people without private health insurance, those who cannot afford it? What is the situation for them?

This change, whilst being beneficial for holders of private health insurance, could see a direct and unfair disadvantage for people who do not have private health cover—the most disadvantaged members of our community. In other words, people with private health insurance will have access to a better overall quality of health care. In effect we will see a widening gap between the two tiers of health coverage.

If the broader health cover provisions give people with private health insurance access to services and treatment options which people without private health insurance may not have access to then the package undoubtedly creates a two-tiered system. People who cannot afford private health insurance will be more likely to end up in hospital, because unlike people with private health insurance, they will not be able to access programs which will prevent them from having to go to hospital. Having private health insurance is indeed out of the reach of many hardworking Australian families—a result in no small part due to the policy of the Minister for Health and Ageing of never denying a request for an increase in premiums.

Private health care should be an additional choice for Australian people. It should not be the only choice. If the cost of such insurance is out of the reach of ordinary Australians then it is no choice at all for them. Having introduced these changes for people with private health insurance, we urge the government to work towards addressing access to these kinds of services for the uninsured.

There is a very real and present likelihood that the changes in this legislation will result in higher premiums. If funds are offering a broader range of products, it follows that they will be expecting to be paid more, and it is therefore likely there will be a spike in premiums as a result of these changes. The Australian Medical Association agree. In their submission to government, the AMA argue that because the private health insurance industry is primarily based on fee-for-service rather than macro-economic funding models, private health insurance funds will have great difficulty persuading anyone that they can expand the range of services covered by their products without any increase in premiums.

This bill weakens the existing legislative framework with regard to government regulation of premiums. Under the National Health Act currently, one of the objectives of the Private Health Insurance Administration Council is to minimise premium levels. However, in the Private Health Insurance Bill, this objective has been removed. Nothing has been done to address the rising cost of private health insurance. This bill encourages further rises. The cost of private health insurance is sadly already out of reach for many residents in my electorate of Richmond. In particular it is out of reach for our seniors who are on a fixed income. The cost of health services continues to rise astronomically and this government has done nothing to address that.

What about taking some real action to drive down premiums? All this government has been interested in is selling off Medibank Private, taking items off the PBS and reducing access to Medicare. On behalf of the people of Richmond I say: enough! Local residents deserve access to affordable health care, in particular seniors who have much greater demand for health care. Premiums have risen by almost 40 per cent in five years under this government, which has made an ideological decision not to regulate the cost of private health insurance. Prices will rise even further. In the future, how will our children and grandchildren ever be able to afford private health cover if we see the continued escalation of premiums? Couple these further changes with the sale of Medibank Private and consumers can expect a massive hike in fees in the very near future.

This government has said previously that premiums will not rise as a result of the sale of Medibank Private. In 2001, this same government said that the introduction of the 30 per cent rebate on private health insurance would put downward pressure on private health insurance premiums. Since then we have seen a 40 per cent rise in private health insurance premiums. As we have said before in this House, federal Labor supports the 30 per cent rebate for private health insurance—we have repeatedly said that. But we certainly do not support this government’s inaction on private health insurance increases. We have a situation now where the Minister for Health and Ageing approves every application from the private health insurance sector for increases in their premiums. This government can come out and say as many times as it likes that premiums will not rise as a result of this bill but we have heard it all before. The fact is that this government cannot be trusted on private health insurance premiums.

This government’s determination to sell Medibank Private will have a huge impact on premiums and will also result in a reduction in services. Indeed, services are already being cut. In my electorate of Richmond we saw that, as a precursor to the sale of Medibank Private, the Medibank Private office at Centro Tweed shopping centre closed just before Christmas last year. This office was then relocated to Elanora on the Gold Coast in Queensland. The sudden closure of the Tweed Heads office caused a huge outcry from locals. This was particularly distressing for the many residents who use that local Medibank Private office. In particular, a gentleman I was speaking to last week, Mr Carl Reman from Cudgen, was telling me how distressed he was that he has to travel all that distance to the Gold Coast. They have four Medibank Private offices up the coast. It is a long way for him to travel, and it is a long way for many other residents—particularly elderly residents.

There are many other health problems within Richmond that this government has failed to address, one in particular being the shortage of GPs. Just recently, I was speaking to the people at the Panorama Plaza Medical Centre in West Tweed, who have been trying desperately to recruit a new GP because their GP is 80 years old and very frail. They were hoping to employ an overseas trained doctor under the workforce shortage criteria, but have been denied that. I implore the minister for health to make an exemption in their case, because they desperately need a GP there to service the many people in that area and surrounding areas—particularly the elderly residents, who, as I have said, have much greater healthcare needs and are very distressed about the fact that they desperately need another GP at Panorama Plaza.

This bill will introduce a requirement for private health insurance funds to produce standard product information on their private health insurance products. Labor supports this change as this requirement is designed to make it easier for consumers to compare different private health insurance products and to understand their entitlements.

Under the current lifetime health cover scheme, private health insurance gets more expensive as you get older. What is supposed to be an incentive to take out private health insurance at a younger age actually turns into a disincentive and a penalty for older Australians. This has not changed with this bill. Currently, people 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. The only concession made is that the private health insurance bill will introduce a change to the lifetime health cover scheme whereby people who have retained private health insurance for over 10 years will no longer be subject to loadings on their private health insurance premium.

There are further concerns in relation to this bill. Labor is concerned that this legislation allows for a 15-month lag between the implementation of broader health cover in April 2007 and the implementation of the standards and quality provisions in July next year. What assurances do holders of private health cover have in terms of standards and quality of service within that time? This represents a completely unacceptable risk to consumers of private health insurance. The government has also wasted an opportunity to address the issue of informed consent. This package should be doing more to address the issue of informed financial consent. Consumers deserve to be fully informed about the costs of treatment. Locals often tell me of the concerns that they have about not being fully informed about costs and then being whacked with huge bills. It is often a very distressing time for them and they are very concerned about all the information that they are not getting. They often end up with big bills because of not having had adequate information. That is an issue that should have been addressed in this bill.

While Labor supports this bill and the positive changes that it will bring for holders of private health insurance, there is a real concern about the impact on those people who do not have private health insurance. Many locals tell me that they are worried about the Americanisation of our healthcare system. There is definitely a two-tiered system, and that is true no matter what level of health care a person wants to access. There is a difficulty in finding bulk-billing GPs. People may have difficulty in accessing dental care. Right across all areas of health, people are very concerned about the spiralling costs, particularly elderly people. Twenty per cent of people living in Richmond are aged over 65. As I have said before, that ratio is estimated to be the ratio for Australia’s population in 2040. We have already got that ratio in Richmond, and we see how extreme the health needs are. They are not being met by this government, which needs to be taking more action in that regard.

There are some problems with this bill. There are problems with quality assurance and there is a risk of an increase in premiums. So many families out there are already doing it tough with the increases in the cost of living. They are telling me that they simply cannot afford an increase in premiums. It would make things very difficult. This bill is a wasted opportunity to make some very positive changes in respect of the sustainability of the industry and about informed financial consent. While there may be some positive changes for those who have private health insurance, it leaves many people behind who are not able to afford or access private health insurance. I urge the government to look at other areas to ensure that those people who do not have private health insurance have access to decent affordable health care. All Australians should be able to access those levels of health care, regardless of their financial situation.

Ken Ticehurst (Dobell, Liberal Party) Share this | Link to this | Hansard source

One of the greatest risks we are facing in our health industry in Australia is that if the Leader of the Opposition becomes the Prime Minister, 43 per cent of Australians will lose private health insurance because Labor will get rid of the 30 per cent rebate. That has the potential to destroy the private health industry. This would be an absolute shame for Australia; it is something the government is not prepared to do. It would also place an additional load on our already overloaded public health system.

I have had private health insurance since my first job after I left school. In those days, we had HCF for hospital and MBF for medical benefits only. I recently had a hip replacement operation and, because I had private health insurance, NIB paid almost $20,000 for that; it cost me $200. We hear all the cries from the opposition about how expensive health insurance is, but the reality is that, when you need to have time in a hospital, if you are insured you can go to a private hospital and it will cost you very little. I could have paid additional premiums and not even had to pay that $200, but I elected to pay that. The Australian government is committed to private health insurance and wants to make it available to all Australians. Australians should be able to decide for themselves whether or not they want health insurance. As I have illustrated with my case, it is to everybody’s benefit to have that private health insurance.

It is the government’s view that the private health sector makes a vital contribution to the national level of health services. The Howard government’s commitment to choice has eased the pressure on the public system. By encouraging more people to take out private health insurance, we are improving the capacity of public hospitals to service local communities. In fact, 56 per cent of all surgery is now performed in private hospitals. If you require emergency surgery, you are unlikely to get into a public hospital because of the extensive waiting lists. If you are privately insured, you can get into a private hospital very quickly indeed.

In my electorate, public hospitals are stretched to capacity thanks to the New South Wales Labor government, which is entirely out of touch with the needs of our community. Hardworking staff regularly have to endure the frustration of not being able to admit patients and struggle with the chaos of choked emergency departments while treating anxious patients and trying to reassure their families. This is an everyday occurrence at both Wyong Hospital and Gosford Hospital. This is not acceptable by any standard, and I am sure that Central Coast residents will express their concerns with the state government in the upcoming state election.

The Private Health Insurance Bill 2006 and cognate bills will only help to ease the burden on public hospitals, as more and more people will opt for private health insurance. Commonsense and initiative, such as the increased rebate for older Australians and Lifetime Health Cover, have helped this government to reverse the trend of a decline in private health insurance while Labor was last in office. When Labor came to power in 1983, 65 per cent of Australians had private health cover. Over their 13 years in government, that figure almost halved, falling to less than 34 per cent. Now, thanks to the Howard government’s measures, that figure has jumped to over 43 per cent and is increasing.

I know many senior residents in my electorate have welcomed the higher rebate, which is making private health insurance more affordable and providing peace of mind. Many older Australians have contributed to private health insurance for most of their adult lives. They contributed in their younger years while enjoying good health. Now, when they need private health insurance cover, it is important that premiums remain affordable.

Similarly, Lifetime Health Cover has been well-received. It provides incentives, such as lower premiums, for all Australians who take out private health insurance cover and stick with it over the longer term. It helps to slow premium increases and helps to stop the hit-and-run syndrome of people joining a private health insurance scheme only to leave after a particular ailment has been overcome. Lifetime Health Cover is great news for the private health insurance system and for the wider health sector. This bill includes a major change to Lifetime Health Cover. People who have retained their private hospital insurance continuously for more than 10 years will no longer be subject to the Lifetime Health Cover penalties. This recognises and rewards the effort that people have made to maintain their cover over time, having first joined at the age of 30 years. They have made the effort and they deserve credit for their commitment and loyalty.

Efficiently run health funds mean lower overheads and less pressure on premiums. This bill includes significant regulatory reforms. The aim of these changes is to make private health regulation clearer and simpler, to help health insurers to run their businesses more smoothly and to work with service providers to devise new products that better meet consumer needs. Of course, Labor continue to oppose private health insurance cover just for the sake of opposing things. They like to pretend private health insurance is a service that is only for the rich, but that is not true. Through policies like Lifetime Health Cover and the 30 per cent rebate for older Australians, 44 per cent of the population, some of whom are earning around $20,000 a year, now have private health insurance cover. The average earning Australian is now able to choose to take out private health insurance if they wish. A decade ago, we did not have the luxury of that choice. The private health insurance rebate saves a typical family something in the order of $800 a year, a benefit that I am sure families in my electorate who have private health insurance appreciate.

The task of revitalising the private health sector is ongoing. These bills tailor health care to the realities of the 21st century. For instance, care does not always centre on being admitted to hospital. Day procedures, outpatient services, hospital in the home, condition management and wellness and prevention are all part of the healthcare equation in a way that simply was not envisaged when the current regulatory regime was devised over half a century ago. These things are inadequately covered by private health insurance as it is currently regulated. This needs changing.

These bills provide for the operation of the government’s private health insurance measures, which were announced by Minister Abbott on 26 April 2006. These measures are designed to increase competition in the industry and improve services to insured persons by allowing insurers to provide policies that reflect contemporary clinical practice. These measures will also simplify the private health insurance regulatory regime, as existing legislation is regarded by the private health industry as outdated and difficult to interpret. These measures are the result of extensive consultation with the private health insurance industry. Since the announcement in April, there has been extensive consultation on the shape and direction of the legislation and further consultation on matters of detail.

It is important to note that these measures will not diminish the government’s strong commitment to Medicare, despite what members opposite would like people to believe. It will not result in a two-tier system. The Private Health Insurance Bill will allow insurers to offer benefits for out-of-hospital services under broader health cover, require insurers to provide standard information to consumers, amend Lifetime Health Cover, introduce safety and quality standards for insured services and change the focus of regulation from insurance providers to insurance products.

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed.