Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

  I am pleased to rise today to speak on the Private Health Insurance Amendment Bill (No. 2) 2014. This bill intends to transfer the functions of the Private Health Insurance Ombudsman to the Office of the Commonwealth Ombudsman. It was introduced by the government as part of their smaller government commitment. It is still unclear, though, how much money this activity will save. When the bill was passing through the House of Representatives, the shadow minister, Catherine King, outlined the reservations that were held by the Labor Party around the transfer of the operations from the Private Health Insurance Ombudsman to the Commonwealth Ombudsman. The bill was also referred to the Senate Community Affairs Legislation Committee for inquiry. This process of referring bills to committees is one of the great pieces of democratic infrastructure that we have in this place. It allows a committee to interrogate all the questions that various senators and parties have. The community affairs committee recommended that the bill be passed, and that is what we are going to do today.

The role of the Private Health Insurance Ombudsman was established to protect the interests of people who are consumers of private health insurance. We wanted to be confident that the protections for those consumers remained—and we were assured that that was the case. The Ombudsman assists health fund members to resolve disputes through an independent complaints handling service. The Ombudsman identifies underlying problems in the practices of private health funds or healthcare providers in relation to the administration of private health insurance. The Ombudsman provides advice to government and to industry about issues affecting consumers in relation to private health insurance and provides advice and recommendations to government and industry about private health insurance—specifically, the performance of the sector and the nature of the complaints. They produce a document very regularly—I think it is quarterly—and it is a very useful document for consumers to understand the trends in private health insurance, and we would hope that the Ombudsman would take on that role as well.

Labor respects the office of the Commonwealth Ombudsman, and notes that it also serves the Defence Force, immigration, law enforcement, taxation, the postal industry, the ACT and the Overseas Students Ombudsman as well, so it is not unusual for the Commonwealth Ombudsman to have specific tasks outside of the general role of the Ombudsman. So Labor will be supporting this bill that will amalgamate the PHI Ombudsman with the Commonwealth Ombudsman, and I commend it to the House.

Scott Ryan (Victoria, Liberal Party, Parliamentary Secretary to the Minister for Education and Training) Share this | Link to this | Hansard source

In bringing this debate on the second reading of the Private Health Insurance Amendment Bill (No. 2) 2014 to a conclusion, I will note the contributions of senators opposite and also address a number of issues that were raised in other debates regarding this legislation.

As has been outlined, the purpose of this bill is twofold. It will transfer the functions of the Private Health Insurance Ombudsman to the office of the Commonwealth Ombudsman by amending several acts of this place. The bill will also amend the Private Health Insurance Act 2007 to repeal provisions that were left over from certain indexation arrangements. The consolidation of these functions will reduce duplication, improve coordination and increase efficiency in delivering the Ombudsmen's services to the community. There is not expected to be an impact upon the services provided to policyholders. The Private Health Insurance Ombudsman will continue to provide educational and other advice to consumers as well as assist in resolving certain complaints.

A number of issues were raised in the other place, and I think it is pertinent to address some of those here today. A concern was raised that this bill will impact upon the capacity of the subject of a complaint to request additional time to report back to the Private Health Insurance Ombudsman about a complaint that would not necessarily be transferred to the Commonwealth Ombudsman. This provision has been removed to ensure consistency with the Ombudsman Act 1976 and to provide efficiencies by streamlining the administrative processes of the Commonwealth Ombudsman. It should be noted that, in doing so, these changes should benefit consumers by potentially providing faster resolutions of complaints, as those organisations that have been complained about will now be required to report within set time frames, without the ability to delay.

The Commonwealth Ombudsman is an independent statutory office-holder and is not subject to direction by anyone on how complaints are to be managed. This is consistent with the approach taken for other industry ombudsmen created under the Ombudsman Act 1976 and ensures complaints are free from interference. For this reason, the power enabling the Minister for Health to intervene when the Private Health Insurance Ombudsman decides not to investigate a complaint has not been transferred to the Commonwealth Ombudsman, in the interests of maintaining this important independence. I further note that the power to intervene has not yet been used by any minister for health, as I understand it.

Additionally, the provision enabling the Minister for Health to request the Private Health Insurance Ombudsman to undertake an investigation has not been transferred to the Commonwealth Ombudsman, for these same reasons of independence. However, it must be made clear that this does not preclude any person from raising concerns with the Commonwealth Ombudsman for their consideration, and that includes any citizen or member of this place.

With regard to certain questions raised about resourcing the transfer, I can confirm that, as part of the transfer of the functions of the Private Health Insurance Ombudsman to the office of the Commonwealth Ombudsman, more than 90 per cent, or 11 of 12, of the current staff of the office of the Private Health Insurance Ombudsman are expected to transfer to the office of the Commonwealth Ombudsman. The transfer of existing Private Health Insurance Ombudsman staff to the office of the Commonwealth Ombudsman will also ensure retention of specialised industry knowledge and provide a continued high level of service to consumers and industry. As someone who has worked in this space, I can attest to the importance of actually having specialised industry knowledge and, indeed, experience in and insight into the operation of this sector.

Additionally, the Private Health Insurance Complaints Levy will continue to be collected, to support the investigation of private health insurance complaints by the Commonwealth Ombudsman, and I can again confirm, as was confirmed by the minister in the other place, that the relevant website, privatehealth.gov.au, will continue to operate.

Finally, I will respond to a concern that was raised with regard to revised penalties for mediation. It is important to note that the current act does not provide for mediation powers for any of its ombudsmen—or ombudspeople. However, the bill seeks to retain a mediation power specifically for the Private Health Insurance Ombudsman, noting the importance of this function. While the corresponding penalty offence has, as far as I am aware, not yet been applied in any example, this was viewed as being an important power to retain. In order to better align with the penalty rates contained within the Ombudsman Act 1976, the penalty rate for the failure to participate in mediation has been revised accordingly; yet it, importantly, still exists.

I thank senators for their contributions and thank those who have raised concerns and listened to the responses, and I commend the bill to the Senate.

Question agreed to.

Bill read a second time.