Tim Wilson (Goldstein, Liberal Party) Share this | Hansard source

It's a pleasure to rise to address the Private Health Insurance Legislation Amendment Bill 2018. Liberals believe in a sustainable health system that delivers quality, equity in access and choice. The very foundations of a health system are that people are free to choose how they seek their care and get their assistance. Think about the millions of Australians in this country right now who face impairment or health challenges and want to decide how to seek care. It is important for them to be able to have choice. Particularly with an ageing population and those wanting to make sure that they can guarantee themselves care at a time of security in their life, the importance of freedom to choose health care is now more important than ever. But freedom to choose health care is based on the system having equity in access and being, of course, critically affordable for all Australians. That's why this legislation and the agenda of the Turnbull coalition government is to make sure that private health insurance is affordable and accessible for those people who seek the freedom to move beyond the public system.

With this bill the government is preparing our health system for the 21st century and beyond. By understanding the drivers of health expenditure we can prepare the private health sector for the times and what we need for the future. Whether it's private health insurance, public hospital funding or primary care, these issues must be debated in the context of Australia's rapidly expanding health sector. One of the critical things that this government is doing, despite the deception of those from the opposition, is making sure that there is record funding for public hospitals. There is also important funding for primary care. But we also see the public system working hand in hand with a robust, strong and competitive private health system.

Health expenditure exceeded 10 per cent of gross domestic product for the first time in 2015-16. Private health insurance expenditure grew by 4.6 per cent in real terms from 2014-15 to 2015-16. Projections by health economist John Goss show that health as a percentage of gross domestic product will increase by roughly one per cent every 10 years, so, in 2032-33 for every $100 spent in the economy $12 will be spent on healthcare service provision. Of course, a lot of this correlates directly to the drive and need associated with an ageing population and the expansion and use of technology to assist people and manage chronic conditions that might once have been fatal.

We need to reform the health system now—and this piece of legislation is one prong in that process of reform—so that Australians can get bang for their health buck and continue to live long, healthy lives into the future. Any discussion about reform needs to have this in mind and also examine what is driving the growth in expenditure and demand. Between 2004 and 2013 the average annual growth of government funded admitted patient expenditure was 7.8 per cent. Hospitals were responsible for the lion's share of this growth, rising by $8 billion from 2002 to 2013.

Analysis of these growing costs shows that there are multiple factors driving the increase in hospital demand. There is excess health price inflation, particularly from the cost of prostheses, which has been an issue that has been addressed in part by this government. Of course, population growth has been critical for part of the rise in healthcare expenses. Ageing is critical because people are living longer, healthier, happier lives. They are living with chronic conditions that once would have been fatal. Of course, they are getting higher levels of care, particularly at the latter stages of life, including palliative care. There is the growth in the real volume of services per person. What that means is that demand for medical services is rapidly rising. This measure accounts for over half the increase in healthcare expenditure.

Medical advances mean that we can do more to help more people. That's always welcome news, given the rates of chronic diseases, such as diabetes and kidney and urinary disease, have increased significantly. The private health insurance sector has the potential to better meet these demands and improve satisfaction among hospital users. This is the core mission of this bill. Some 13.5 million Australians rely on private health insurance when they need it—and I am one of them and the Goldstein electorate is proud to have a very high rate of private health insurance policy take-up, because people in Goldstein value freedom in choice.

Private health cover accounts for two out of every three non-emergency procedures. And it's not just for the wealthy: one in four policyholders have an annual income of less than $30,000, and almost half make $50,000 or less. These reforms are about getting those people, low- and middle-income earners, a better deal so they can have choice and not be compelled only to the system that our political opponents demand be provided for them. And it's about modernising our healthcare system so that it can meet the needs of today and tomorrow.

This bill addresses the high out-of-pocket costs for consumers as well as a lack of transparency and sustainability in the sector. Australians spend more on out-of-pocket costs than the OECD average. Unexpected out-of-pocket costs are a major issue for private health insurance users. While 86 per cent of services are covered under the no-or-known-gap arrangements, the remaining 14 per cent of services incur out-of-pocket covers not covered by insurance. Procedures in hospitals include bills from multiple sources: of course, the surgeon, the assistant surgeon and the anaesthetist, among many others. For instance, you might have been booked in for spinal surgery and thought you were fully covered, but end up facing large, unexpected out-of-pocket hospital expenses. One in seven private patients experience these costs, and they are often significant bills. The average out-of-pocket cost for spinal surgery is $2,250.

Transparency regarding these charges is, of course, desperately needed. The government has established an expert committee to work with consumers, the medical sector and private health insurers on the best method of simplifying out-of-pocket expenses, and these recommendations will resolutely benefit consumers. Furthering our transparency and accountability objective, the bill also strengthens the power of the Private Health Insurance Ombudsman.

Increasing costs of medical prosthesis have put upward pressure on premiums for years. These reforms will deliver immediate relief for private health insurers by reducing benefits paid for medical devices on the prosthesis list. The benefit will contribute to the lowest premium rise consumers have faced in 17 years. I'll repeat that: the benefits from this legislation will contribute to the lowest premium rise consumers have faced in 17 years.

Despite this, health insurance membership is falling, particularly among young Australians, and we must tackle that challenge now. To have a sustainable private health insurance system you need people participating at all stages of life. We owe it to younger Australians to fix this problem, especially given the importance and the long-term sustainability of the health system. Healthcare costs most not become another hindrance preventing young people from getting ahead. So if you're 18- to 29-years-old, this bill allows insurers to offer you products with discounted premiums of up to 10 per cent. It also allows insurers to offer lower premiums to everybody, offset by policies with higher excess payments. On top of the $92.4 million investment in frontline mental health services in this year's budget, this bill continues to address the mental health concerns—

(Quorum formed) It's always good to have a bigger audience. Let's get back to the point—that is, we're passing this piece of legislation, and it is a good bill. On top of the $92.4 million investment in frontline mental health services delivered in this year's budget, this bill continues to address the mental health burden faced by many Australians. Mental disorders are one of the highest drivers of increased volume of services per person between 2004 and 2013. Once implemented, these changes will allow people to upgrade their cover and access mental health services without a waiting period on a one-off basis. This contributes more value to the health insurer products, particularly for young Australians, who are disproportionately affected by mental illness.

Value is also added by allowing insurers to offer travel and accommodation benefits for people in rural and regional areas. Access to private hospitals is limited in rural, regional and remote areas. Given one of the largest barriers to ongoing continuity of care is the tyranny of distance across the great brown land we call home, these very welcome reforms reflect the Turnbull government's understanding of the challenges facing all Australians. Currently many insurance policies are hard to disentangle. There are inconsistencies in treatment definitions and coverage levels, making them difficult to compare. This bill requires insurers to categorise products as gold, silver bronze or basic and use standardised definitions for treatments to make clear what is and isn't covered in their policies. The PrivateHealth.gov.au website will also be upgraded to make it easier to compare insurance policy products. This bill represents a series of considered evidence based changes to enhance patient satisfaction. It helps all Australians, but particularly young Australians, with their health costs, empowers consumers through policy transparency and sets up the private health sector for ongoing, enduring and meaningful reform so the health system can deliver for the Australians it was designed to serve.

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