Josh Frydenberg (Kooyong, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Private Health Insurance (Risk Equalisation Levy) Amendment Bill 2015 is one of three bills in this package that provides for the continued imposition of levies upon the private health insurance industry.

This bill will amend the Private Health Insurance (Risk Equalisation Levy) Act 2003 to give APRA the functions previously undertaken by the council. These functions include the setting of the amount of the risk equalisation levy.

The purpose of the risk equalisation levy is to ensure that no insurer is unduly impacted by costly claims because of the risk profile of its members. It does this by allowing for cross-subsidisation for aged, chronic and long-term acute-care patients and other high-cost policy holders across different private health insurers.

The risk equalisation levy assists insurers to offset the effects of complying with the principle of community rating established under the Private Health Insurance Act.

The health minister will retain overall policy responsibility for the risk equalisation levy, with APRA maintaining a similar role administering the risk equalisation special account as the council had administrating the Risk Equalisation Trust Fund.

APRA will maintain the council's power under the Private Health Insurance Act to request information from insurers about their liability to pay the risk equalisation levy, and APRA will also have the power to investigate in relation to the levy under part 6 of the Prudential Supervision Act.

The full details of the amendments are contained in the explanatory memorandum.

Debate adjourned.