Wednesday, 28 March 2018
A New Tax System (Medicare Levy Surcharge — Fringe Benefits) Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018; Second Reading
That this bill be now read a second time.
The A New Tax System (Medicare Levy Surcharge—Fringe Benefits) 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 Medicare Levy Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018.
Changing voluntary 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. Consumers can choose—and I emphasise the fact that it will be a matter of choice for them—a higher excess in return for lower premium costs. This will be the first time such choice in the level of excesses 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 A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999.
These changes ensure that individuals purchasing appropriate complying health insurance products for private hospital cover with increased excess levels will be able to claim the Medicare levy surcharge exemption.
I commend the bill to the House.