Greg Hunt (Flinders, Liberal Party, Minister for Health) Share this | Hansard source

I take the opportunity today to sum up on the bill before the House, the Private Health Insurance Legislation Amendment Bill 2018, and on the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018 and the Medicare Levy Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018. Private health insurance is a fundamental element of the Australian health system. It is supported by the government, and more than 50 per cent of Australians have some form of private health insurance.

The package of reforms I announced last October will help strengthen the viability of the private health system by addressing concerns about the affordability, complexity and lack of transparency of private health insurance. In addition to the investment of over $6 billion for the private health insurance rebate, this government continues to take pressure off private health insurance premiums, with the introduction of these reforms delivering the lowest annual premium change in almost two decades.

The Private Health Insurance Legislation Amendment Bill 2018 will amend the Private Health Insurance Act 2007 and associated legislation to support a number of the reforms I announced last year. The Private Health Insurance Legislation Amendment Bill 2018 will increase maximum excess levels for products providing an exemption from the Medicare levy surcharge. This will improve affordability for consumers and will be the first time excesses have been increased since 2001. It will do so on an opt-in basis, which will allow consumers and premium-holders to choose whether or not they wish to take that option.

The bill will allow for age based premium discounts for hospital cover. This reform will improve the affordability of private health insurance for young Australians and provide them with the benefit of their choice of doctor, timing of treatment and shorter waiting times.

Amendments in the bill will strengthen the powers of the Private Health Insurance Ombudsman to protect consumers' interests. The Private Health Insurance Ombudsman will be able to conduct inspections or audits at insurers' premises to verify accuracy of information. Private health insurers will be able to cover travel and accommodation costs as a part of a hospital product for people in regional and rural Australia attending health services often a long distance from their home. Patients and their carers are likely to see increased value from their product due to this change.

Private health insurance can be complex and confusing. Certainly this is what we heard from consumers in the online survey which had over 40,000 respondents. We want to make information simpler and more transparent for consumers. The first step in this process is the introduction of a new private health insurance statement which will replace the current standard information statement insurers are required to provide. The private health insurance statement will offer more flexibility for insurers to provide information that is relevant and personalised for their consumers.

Reforms will be made to the administration of second-tier default benefit arrangements for hospitals. These changes will reduce the administrative burden on both private hospitals and health insurers.

This bill will facilitate the termination of closed products and migration of people to new products. This change will make it easier for people to compare products and will generate considerable efficiencies in the system.

The revised explanatory memorandum to the bill makes it clear that private health insurers have consistently provided access to the Private Health Insurance Ombudsman's investigating officers to verify the accuracy of information, and this is expected to continue. It is expected that the PHIO would continue to provide private health insurers with at least 24 hours knowledge of access to best assist with investigations. The purpose of entry in these circumstances is not to obtain evidence to support a criminal or civil prosecution; the intention is to confirm information provided by a consumer and to enable the PHIO to make non-binding recommendations, having received comprehensive information from both parties.

The government recognises that benefit limitation periods can be an area of confusion for some private health insurance members, and it has now decided that all benefit limitation periods should be removed to make private health insurance products easier to understand for consumers. Although benefit limitation periods have been applied under the Private Health Insurance Act since 2007, the act prohibits benefit limitation periods longer than specified maximum waiting periods. Consequently, many health insurance policies may have not met the requirements of the act since it was introduced in 2007. Changes to the act will ensure people who may have purchased noncompliant private health insurance policies, and insurers who may have sold those products over the last decade, are essentially placed in the same legal position they would have been in if the products had complied with the act. To this effect it will appropriately protect both consumers of private health insurance and private health insurers.

The two tax bills—the Medicare Levy Amendment (Excess Levels for Private Health Insurance Policies) Bill and A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018—deal with taxation related aspects of the reform. These changes ensure individuals purchasing appropriate complying health insurance products for private hospital cover with increased excess levels will be able to claim the Medicare levy surcharge exemption. While the legislation brings into effect a number of important reforms, a lot of the detail will be provided in the private health insurance rules, and the government will also be consulting on the details of the rules. I thank all of those within the industry, the broader health sector, the department and my office for their work in helping to progress this, in particular my principal advisor, Alex Caroly. I thank members for their contribution to the debate on these bills, and I commend the bills to the House.

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