Christopher Back (WA, Liberal Party) Share this | Hansard source

I rise to support the Private Health Insurance Legislation Amendment Bill 2013. Following Senator Moore, I remind the chamber and those who may be listening that more than 10 million Australians have some form of private health insurance. It is critically important to recall the fact that these people come from all socioeconomic levels in Australian society and from all age ranges. Especially they are young married couples, young families, who have the challenge ahead of them and those at the other end of the age spectrum who will always be needing health services. Therefore, anything that interferes with the integrity of the private health insurance system must be observed with some degree of fear and apprehension. That is why I support the legislation.

Indexing the private health insurance rebate is one of several measures introduced by the previous Labor government which adversely affected Australians taking responsibility for their health through private health insurance. This legislation should help to address that. While the Private Health Insurance Legislation Amendment Bill will make indexing the government rebate simpler for funds to administer, the reality is that providers have been opposed to indexing because it may lead to a change in decision making by members of funds. Their premiums will steadily increase as the rebate diminishes over time, and that is of concern. It may lead funds to downgrade the quality of service and the level and breadth of protection that members currently enjoy, or people may drop their private health cover altogether, which is inevitably going to adversely affect their own health outcomes and place more pressure on the already overloaded public system.

That brings me to the objective, which is to simplify the current implementation arrangements for indexing the government's contribution to the rebate by amending the Private Health Insurance Act 2007. This creates a single adjustment factor under a legislative instrument, and I am pleased to see that the Labor Party is supporting this thrust by the government. It will be adjusted uniformly across all insurance policies on 1 April each year by a factor to be determined in accordance with the Private Health Insurance (Incentives) Rules. This is an incredibly important feature for administrative purposes and, ultimately, for those who have premiums. The adjustment factor will be a ratio representing the proportion of the increase in the CPI compared to the average private health insurance premium increase. That should give some level of stability.

It is interesting that at the moment—and this is advice from industry—there are over 34,000 policies on the market. The burden placed on insurers to comply with the application of a unique rebate for each policy type is estimated to be in excess of $15 million in implementation costs alone, and those costs inevitably go back into premiums. That is what we want to see stopped. The industry has advised that, according to minister, the bill will result in administrative savings of around 80 per cent of the cost of implementing the previous Labor government's Private Health Insurance Legislation Amendment (Base Premium) Act 2013.

All of these factors point to the need for Australians to remain in private health insurance funds and for them to be attracted to do so. Indexing private health insurance rebates has been the wrong way to proceed. This legislation at least improves the circumstance. It will simplify it, get it to a stage where there is a once-only annual change and, at the same time, it will encourage those who are already participating to remain in private health and encourage young people to come into the private health system.

I, like Senator Moore, hope that we will have a robust discussion about the future of our provision and delivery of health services in this country. I was in the United States during the three months of last year when the Obamacare issue was so hotly debated, and it all turned on young people signing up. As people unashamedly said, it is going to be the premiums paid by young people that will fund the system for Americans into the future. None of us want to see here the debacle that is currently going on in the United States.

I commend the amendment bill to the chamber.