Paul Neville (Hinkler, National Party) Share this | Hansard source

As someone who supports a sustainable, balanced and functional private health insurance regime, it will come as no surprise to honourable members that I oppose the Fairer Private Health Insurance Incentives Bill 2011 and related bills.

Time after time, the government has tried to get these bills through the parliament and it has been thwarted on each occasion. There is one resounding reason why these dogs of bills should not pass, and that is that it will jeopardise the health of Australians by weakening the private health sector and ramping up the pressure on the public system.

These amendment bills will proportionately lower the private health insurance rebate for those on higher income tiers and increase the Medicare levy surcharge for those on higher incomes who do not hold private health insurance. In effect, the amendments are attacking the viability of the private health insurance sector by making it a far more expensive option for the ordinary Australian and his family. The amendments will place further stress and strain on our public health system by driving people from the private health sector to the public sector. They will take choice away from citizens—and I have always believed that choice is paramount in this matter—and this will be to the detriment of Australia's health profile overall.

This is not the first time that the government has tried to phase out the 30 per cent private health insurance rebate or jack up the Medicare levy surcharge. As I said, this is the third time that the parliament has considered this legislation, despite the former health minister, at the 2007 election, making the explicit promise:

Federal Labor has made it crystal clear—

note 'crystal clear'—

that we are committed to retaining all existing private health insurance rebates.

That was a media release on 26 September 2007. There are 10.2 million people, or more than 45 per cent of Australians, who have private health insurance. Around 2.4 million of these will be directly impacted by the proposed changes because they will see their premiums increase overnight due to the government's plan to bring three new index tiers into line as the assessable measures for health insurance. For singles, the proposed tier 1 is over $70,000, the proposed tier 2 is over $90,000 and proposed tier 3 is over $120,000. People earning over those amounts will see the amount of their rebate reduced. These people will face immediate increases in premiums of 24, 29 and 34 per cent respectively. For families the bill proposes that each of these thresholds be doubled and in the case of each additional dependant the income tier threshold would increase by $1,500 for each dependant.

The former health minister tried to dismiss the impact of the changes by saying that only 27,000 people were expected to drop their private health insurance cover because of these increased premiums. This is complete poppycock. When families and older Australians in particular are already struggling to cope with the cost of living they will obviously be forced to reconsider staying in private health insurance; if they do not, they are going to cop double-digit increases in their premiums. The government's rubbery figures have been exposed by its own private health insurer, Medibank Private, which predicted that at least 37,000 of its members would drop their cover entirely and 92,500 would downgrade their cover. A further analysis by Deloittes shows that in the first year alone following the proposed changes 175,000 Australians are expected to withdraw and a further 583,000 people to downgrade their coverage.

But, more frighteningly, the Deloittes study found that the situation would worsen over time and within a five-year time frame following these proposed changes 4.3 million people would downgrade their coverage and up to 1.6 million people would drop out entirely. That is out of the current total of 10.2 million. That is a significant impact by any standards. It means that 1.6 million people over five years will rely on the public system to cope, and we know what the public system is like right now. In Hervey Bay in my electorate the hospital operates with an occupancy of over 100 because people come in and out on the same day and use beds on the same day. What happens sometimes is that you have three or four—and I have heard that on one occasion there were five—ambulances lined up with the stretchers and the ambulances being used as temporary accommodation until the people can be taken into the hospital. This queuing of ambulances has simply got to stop. What chance have they got with another 1.6 million people coming into the system?

More than 40,000 adults living in my electorate have private health insurance, with almost 53,000 people, including children, covered by their policies. Hinkler is not a wealthy electorate. We have one of the largest over-65 demographic profiles in the country and we face challenges in terms of unemployment, with average household income amongst the lowest in Australia. That profile is quite common amongst Australian households with health insurance. There are 5.6 million Australians with health cover who earn less than $50,000 a year and around one million of those have incomes of less than $24,000. You might say: 'Why are you mentioning that? These people are not caught by this reduction in the rebate.' But, yes, they are. If we go back to Deloittes findings we will see that they predict that there will be a 10 per cent increase in premiums. The reason for that is simple: as the 1.6 million people drop out, we are going to get to a situation where the pool will be smaller for private health insurance and therefore the premiums are going to have to rise. So everyone, not just the ones in the higher categories, will be caught up in this. Every single one of my constituents who holds private health insurance is trying to do the right thing by taking care of their own health needs, by spending their own money on health insurance. Just why this government wants to push them even further is beyond my comprehension.

This brings me to another point, and that is the blatant cost-shifting between the federal and state systems which will occur if these bills are passed. The realities of life are that if you hit millions of Australians with increased premiums many of them will drop their insurance entirely, leaving, as I said before, the remaining policyholders with higher premiums. As I also said before, Deloittes have told us that this will increase premiums by as much as 10 per cent. In a double-whammy, those people who have left private health will turn to the public system, adding further to the pressures that exist there.

I want also to bring to your attention, Mr Deputy Speaker, another factor that is not talked about a lot. In country areas, larger provincial cities and some of the larger country towns, we have private hospitals. In my own case, in Bundaberg we have two private hospitals and Hervey Bay will shortly have two. When you have three hospitals in the town you have a much greater ability to attract specialists. The specialists come to those sorts of towns because they can do sessional terms at their public hospital and then can work perhaps at their surgeries at the private hospital or out in the community and operate at both the private hospitals. They find that very attractive, a good lifestyle, and they are not captive of the public system entirely. That brings specialists to the country. If you weaken the profile of the private hospitals in the country, you are not going to get those specialists and everyone will suffer—not just the people who have private health insurance, but everyone. Even those people in the public hospitals may miss out on having a sessional specialist available. So it is a very serious matter.

There is one hospital in the Wide Bay area—it is not in my electorate but it is close to my electorate—and I know that this cutback in private health insurance will affect that hospital dramatically. We just cannot afford to have that happen.

Last year, the Queensland AMA spoke out about a patient who had been refused access to a specialist at a Gold Coast public hospital. They condemned this 'new low in service provision by Queensland Health'. The AMAQ received a copy of a letter, from the hospital's executive director of medical services to the GP, advising that regrettably the waiting list was lengthy and that his or her patient would not be seen in a reasonable time frame. The letter said:

… we are therefore returning this referral to you and ask that you consider other options—

which, the letter said, could include—

… referral to a private practitioner or another appropriate hospital within the southern area.

That is the sort of thing which is likely to happen and happen on an even greater scale.

In a press release issued by the then president of the AMAQ, he said the letter was an admission of monumental failure by Queensland Health in meeting the needs of patients forced to rely on the public system for their healthcare needs. He said:

Never before has a public patient been so abandoned by our health system.

If it is that bad now, what is it going to be like when there is a shift of up to 10 per cent from the private system to the public system? The impact of that is going to be quite dramatic. For all sorts of reasons, then, it is a frightening prospect that, of the 10.2 million people currently in private health insurance, 1. 6 million might drop out over the next five years and another 4 million or 5 million might downgrade their coverage.

We have one of the best hospital systems in the world. As part of the last coalition government, I take some pride in the fact that we not only introduced the 30 per cent rebate but acted to assist older people—and there are lots of pensioners and lots of self-funded retirees on low incomes who rely very heavily on private health insurance. We introduced increased coverage of 35 per cent at 65 years of age and 40 per cent at age 70. In fact I urged John Howard to go to 45 per cent, but that was not possible.

It is a pity that, in the face of this marvellous increase in people looking after their own health care—going up as a percentage of the population from the low 30s to the mid 40s—this government, for base philosophical reasons, has just turned on private health insurance. I very much urge the Independents to support us on this. Some of those Independents represent cities like Armidale, Port Macquarie, Taree and Tamworth, and those are the sorts of cities I was talking about which need specialists. They need specialists to have effectively operating private hospitals. Without those private hospitals, and without those private hospitals having throughput of private patients, in many of those towns the number of specialists will reduce and the quality of health care will drop. For that reason alone we should be very careful about this whole matter.

As I said at the beginning, it should come as no surprise to the House that I oppose these bills. I know my colleagues in the coalition also oppose them and I urge those on the crossbenches who really care for regional Australia to do likewise.

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