Tuesday, 22 June 2021
Private Health Insurance Legislation Amendment (Age of Dependants) Bill 2021; Second Reading
The opposition will be supporting the Private Health Insurance Legislation Amendment (Age of Dependants) Bill 2021. We know the scale and impacts of private health insurance cost increases under this government over the last eight very long years. Between 2013, when this government took office, and 2019 the average price of a family insurance policy increased by more than 30 per cent or, on average, by more than $1,100, while wages remained flat. That, as we all recall, was famously described by our former finance minister in this place as a 'design feature' of Liberal economic policy. Thank you, Senator Cormann! At least someone was willing to tell the truth on occasion.
Australians have seen a very serious cost-of-living squeeze on households, and the Labor Party has been loudly advocating any measure that would ease this pressure on Australians. The bill changes the way in which family private health insurance policies operate, particularly in relation to dependants, in two important ways. Firstly, it changes the definition of dependent young adults from dependants up to the age of 24 years to young adults up to 31 years of age, but it is worth noting that the young adult must still be a dependant. This is an important measure that the Labor Party support. We support this bill because it eases the squeeze on private health costs for dependent young adults in the community.
This is a growing gap in Australia because of the huge increases over the last eight long years in housing costs. This has resulted in extraordinary difficulty for young Australians who seek to break into the housing market and achieve their dream of owning a home. It means that every year we see more young Australians remain dependants rather than purchasing their own homes. Among other things, this is yet another impact of the flat wages that this government has said are a deliberate design feature of its economic policy.
Young Australians have also been disproportionately impacted by the job losses that have flowed from the recession caused by the pandemic. Industries like tourism and hospitality have an overrepresentation of young workers and have been disproportionately impacted by the COVID recession, yet help was not on hand for so many of those workers in casual roles, who were absolutely left out in the depths of the pandemic. Too many young Australians have been hit by this double whammy: ever-rising cost-of-living increases on one hand and flat wages or, worse, unemployment or underemployment on the other.
Currently when a young dependent adult turns 24, regardless of their circumstances, they are forced by the existing legislation to take out their own health insurance. Too many simply do not have the financial capacity to do so, and so they just don't. This bill will allow them to stay on their family policy until they reach 31 years of age. This is an important measure because, as a result of the growing difficulty young Australians face in owning their own home, under current arrangements those young adults become disconnected from private health insurance coverage. Because these young adults become disconnected from coverage in their late 20s, they are often not covered when they turn 30 and the lifetime health cover arrangements kick in.
Lifetime Health Cover is a policy that was introduced 20 years ago by the Howard government and it remains a policy that has bipartisan support. Through a mix of incentives, Australians from the age of 31 are encouraged to take up private health insurance if they have the capacity to do so. The bill is also a very important measure that allows dependent adult children with a disability to remain covered by their family's private health insurance policy with no age limit. Currently, on their 24th birthday, a dependent adult child with a disability would have to take out their own insurance policy, and we know that adult children with a disability have an even greater need for private health insurance coverage than young adults without disability. It means that young adults living with disability who turn 24 do not have to seek their own individual policy. Rather than taking out a new policy that would be more expensive than the proportionate share of the family policy, dependants living with disability will now be able to be covered by the family policy at a lower proportionate cost.
This bill provides a minimum definition of an adult dependent person with a disability as, effectively, someone who is a participant in the NDIS, the National Disability Insurance Scheme. This minimum definition has been the subject of substantial consultation between the government, the insurance industry and disability organisations. Labor have been talking to disability organisations and we understand that there is an appetite to push for broader coverage. We understand there are a number of Australians who, because they live with disability, are still dependent on their family and who may not be NDIS participants. While this minimum definition does not cover all Australians living with disability, we note it is a minimum definition only.
In our discussions with the insurance industry, it has become clear that industry participants hold grave concerns about the impact of an expansive minimum definition of 'disability' in the bill. An overly broad minimum definition will mean it will not be financially viable for insurance companies to offer new products that take advantage of the intent of the bill, leaving Australians living with disability without new insurance products that they can take advantage of. All senators may note that this bill does not compel insurance companies to deliver new products for market; it simply allows them to, should they be able to do so in a financially viable way.
In short, a minimum definition may seem like a worthwhile principled position to take but it poses a very serious and real risk of effectively wiping out all the benefits of the bill for all dependent Australians living with a disability. It would be a powerful example of good intentions undermining good reforms.
In our discussions with industry, it has been made clear that the industry will offer products that include coverage that go beyond this minimum definition to capture more Australians living with disability. We welcome these commitments and strongly encourage the insurance industry to work with disability organisations to ensure their new products have as broad a coverage as possible while maintaining the financial viability of the industry. To this effect, we have sought and received a commitment from the government that the bill and its effectiveness will be reviewed once it is practical to do so. This review will be open to stakeholder participation, will report publicly and it will explore the coverage provided to those living with disability. We welcome this commitment from the government in good faith and, as a result, we will not be supporting the Greens amendment seeking to both broaden the minimum definition of 'disability' to one that the insurance industry tells us is inconsistent with sustainable products being put in the market and to legislate a review of the bill made unnecessary thanks to the government's commitment to a review. Labor commends the bill to the Senate.
I rise to speak on the Private Health Insurance Legislation Amendment (Age of Dependants) Bill 2021. This bill sets a very dangerous precedent in terms of the definition of 'disability'. While the Greens will be supporting the bill, we will be moving amendments that address that particular issue because of the fact that the definition under the bill is a participant under the National Disability Insurance Scheme Act 2013. Using a threshold of an NDIS participant is problematic because it will restrict disabled people from accessing the benefits of this measure. Only 449,000 people are currently participants of NDIS, whereas the ABS estimates there are 4.4 million disabled people in Australia. Applying the definition of an NDIS participant will restrict access to these policy changes—that is, nearly four million disabled people that will be restricted from accessing the benefits of this policy. That's why the Greens will be moving the amendments. We are very disappointed that Labor won't be supporting them, because they are such important amendments.
We believe that we need a review. In fact, we have another amendment about that. Now, this bill is about to be chopped through. The minister for health, Minister Hunt, has written me a letter about the review, not supporting the legislative approach which we want, but committing to a review. I seek leave to table the document from Minister Hunt.
I also seek leave to table the rest of my speech.
Question agreed to.
Bill read a second time.
I will now deal with amendments circulated by the Australian Greens. The question is that the second reading amendments on sheets 1263 and 1240, circulated by the Greens, be agreed to.
Australian Greens' circulated amendments—
(1) Page 2 (after line 11), after clause 3, insert:
4 Review of the operation of amendments
(1) The Minister must cause an independent review to be conducted of the operation of the amendments made by this Act.
(2) The review must start as soon as practicable, and in any event within 1 month, after the end of 18 months after this Act commences.
(3) The persons who conduct the review must give the Minister a written report of the review within 6 months of the commencement of the review.
(4) The persons who conduct the review must consult with disability advocacy organisations, people with a disability, and other relevant stakeholders on matters considered in the review.
(5) Without limiting subsections (1) and (3), the review and report must consider:
(a) the implementation and effect of reforms made by the amendments in this Act; and
(b) the results of consultation under subsection (4); and
(c) the operation of the definition of dependent person with a disability inserted into the Private Health Insurance Act 2007 by this Act.
(6) The Minister must cause a copy of the report of the review to be tabled in each House of the Parliament within 15 sitting days of that House after the report is given to the Minister.
(1) Schedule 1, item 20, page 5 (lines 26 to 28), omit subparagraph (b)(i) of the definition of dependent person with a disability in clause 1 of Schedule 1, substitute:
(i) a person with any limitation, restriction or impairment which restricts everyday activities and has lasted, or is likely to last, for at least six months; or