Wednesday, 28 March 2018
Medicare Levy Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018; Second Reading
That this bill be now read a second time.
The Medicare Levy Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018 is part of a package of three bills, each containing necessary amendments relevant to implementing reforms relating to increased maximum excess levels for private hospital cover.
The other two bills are the Private Health Insurance Legislation Amendment Bill 2018 and the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018.
Changing excess amounts to allow increased excesses of $750 for singles and $1,500 for couples and families will mean insurers can offer lower premium prices, improving affordability for consumers. Importantly, consumers can choose—and I emphasise 'choose'—a higher excess in return for lower premium costs. It is a matter of choice for them which will be available. This will be the first time the opportunity to choose higher excesses in return for lower premiums has been increased since 2001.
The government has also decided to remove grandfathering provisions that provided the Medicare levy surcharge exemptions for certain policies that predate the commencement of the Private Health Insurance Act 2007. This means that, consistent with existing government policy, individuals will need to hold an appropriate complying health insurance product in order to access the Medicare levy surcharge exemption.
As the removal of the grandfathering arrangements may have a flow-on effect where some individuals become liable to pay the Medicare levy surcharge, the schedules effecting tax must be presented as separate bills.
This bill deals solely with taxation related aspects of this reform and amends the Medicare Levy Act 1986.
Changes will mean that the application of the Medicare Levy Act 1986, insofar as it relates to the Medicare levy surcharge exemption for private health insurance will be consistent with the updated Medicare levy surcharge exemption requirements that allow for higher excesses.
I commend the bill to the House.