Thursday, 22 June 2006
Health Legislation Amendment (Private Health Insurance) Bill 2006
The proposal of the Labor Party is to extend the powers of the Private Health Insurance Ombudsman even further than what is proposed in the legislation. The amendments allow the Private Health Insurance Ombudsman to refer all matters related to issues within his or her scope. The first amendment suggests that the PHIO can refer matters to the ACCC. The second amendment allows the minister to refer matters to the ACCC. The fifth amendment allows the PHIO to refer a matter to another body. The sixth one allows the minister to refer, if appropriate, a matter to another body.
For this amendment to take effect there also must be an amendment to the Trade Practices Act and in particular to part VIIA, the prices surveillance section of the act. Part VIIA of the TPA allows for price inquiries, price notifications and price monitoring. However, the amendment we are seeking relates only to the ACCC powers to hold and report on inquiries—that is, we are not proposing that the private health insurance market be subject to price notification.
The amendments also will allow the minister to direct the ACCC to hold an inquiry into specified matters and report its finding to the minister, who then can make decisions on its recommendations. Companies are liable to a maximum penalty of 100 penalty points if they increase prices during an inquiry without approval from the ACCC.
Public inquiries initiated under the PSA have been used for a number of purposes in the past, including to determine whether pricing outcomes reflect competitive market forces, to advise the minister on what types of prices oversight, if any, should be applied to the company or companies under inquiry and to play an educative role by bringing information into the public domain, thereby facilitating public understanding of the pricing matters at issue. These amendments, I think, extend the scope of the bill in question. In Labor’s view they will give far more consumer protection, using the Private Health Insurance Ombudsman’s role, than envisaged by the government.