Katie Allen (Higgins, Liberal Party) Share this | Hansard source

I rise to speak on the Private Health Insurance Amendment (Income Thresholds) Bill 2021. Importantly, the reforms outlined in this bill continue the current pause on the annual indexation of income thresholds for another two years, allowing for annual indexation thereafter. The pause provides stability for consumers and stakeholders regarding the operation of these important private health insurance incentives while a detailed study into the effectiveness of their operation is undertaken.

The bill amendments continue to secure the future of private health insurance by continuing to incentivise high-income earners to financially contribute towards their own healthcare costs or pay the Medicare levy surcharge and continues to incentivise customers to purchase and maintain private health insurance cover. This bill will further promote Australians' freedom of choice when it comes to health. It is designed to support the sustainability of private health insurance and, accordingly, is intended to promote individuals' access to health services.

The Morrison government has already delivered the most significant reforms to private health insurance in over a decade. The government's reforms have delivered the lowest average premium changes in 20 years, of 2.74 per cent in 2021. The government is committed to improving the affordability, value and attractiveness of private health insurance, particularly for younger Australians. It is demonstrating this through further reforms to private health insurance. The Australian government is investing $30.6 million over four years to continue to make private health insurance simpler and more affordable for Australians. This is in line with the Morrison government's commitment to delivering an even better post-COVID-19 healthcare system.

We should be ambitious for our healthcare system. A dream for an even better healthcare system is why I served on a local hospital board, Cabrini Hospital, before coming to this place. Cabrini is the only hospital in Higgins and it is a not-for-profit private hospital. As I said in my first speech, our healthcare system is already undoubtedly one of the best if not the best in the world. In fact, rankings worldwide show we're No. 2 in the world, and that is no mean feat. It is a unique and effective blend of public and private, where the private sector provides innovation and choice and the public sector provides a safety net for all. In our two-tiered system, the private health sector acts as both a complement and a substitute for the public health system. We take the best from the European system, which is more socialised, and the best from the private system in the US. We have a very good system which provides a good, high-quality baseline level of health as well as choices and options for those who wish to pay more for flexibility and accessibility in their insurance.

As a member of parliament representing a vibrant younger electorate and as a mother of four young adults, I know how important reforms to ensure a successful private health insurance system are, particularly for the young. The Morrison government is working hard to make sure our nation's private health insurance is simpler and more affordable. We on this side of the House are firmly committed to strengthening and simplifying private health insurance and making it more accessible. Our community rating system depends on these tenets.

The 2021-22 budget improves the sustainability of and access to the private health insurance system. To this end, we've included five initiatives.

Firstly, we will modernise the private health insurance prosthesis list by aligning prices paid by insurers more closely with public hospital prices to improve affordability. I cannot stress enough how important this major reform is and how welcome it is to the sector. The minister for Health, Greg Hunt, has worked very closely with the different players in the sector to make sure that we deliver an outcome that is going to be well received by everyone across the sector.

Secondly, we will improve the private health insurance rebate modelling capabilities through better data and behavioural insights. By using the most up-to-date evidence and insights, ultimately we'll provide more value for money for consumers.

Thirdly, we will optimise the private hospital default benefit arrangements by funding an independent study of the current settings, to ensure that access to and the cost of private hospitals is optimal for consumers. Fourthly, we will apply greater rigour to certification for hospital admissions, to resolve disputes between insurers and care providers when patients are hospitalised for care normally delivered out of the hospital—and I know how this issue does keep boards up at night.

Fifthly, and importantly, we will continue the income-tier thresholds for the Medicare levy surcharge and private health insurance rebate for two years to 1 July 2023 and undertake a review to ensure that the settings of these important incentives support affordability of private health care. The bill means that, for the next two financial years, the private health insurance rebate income thresholds remain unchanged at $90,000 for the base single policy and $180,000 for the base family policy until 30 June 2023.

This progress continues on our second wave of reforms to private health insurance, implemented over years. It is indeed a complex set of negotiations that the minister for health has pursued and delivered. We've already increased the age of dependents able to stay on a family policy, to encourage younger people up to age 31, and also people with a disability, to maintain their private health insurance.

I'd like to provide an example of how this legislation has helped people in my electorate. A Higgins constituent waiting for public-listed appointment for his epilepsy had a serious, life-threatening fit when he was overseas in Chile. This was because he'd been a patient at a children's based public hospital and had not yet transferred his care to an adult based public hospital. This young man had been waiting for a long period of time in the public health system. He'd finished university and was in the first year of his job. Private health insurance wasn't one of his financial priorities. It's very understandable for young people, when they're getting their first pay packet. But, as a result, he waited longer than was necessary for an appointment. He ended up not getting the medication adjustment that was needed, and he had a seizure. That young man happened to be my son. So I was delighted to see that this legislation would apply to him and that he would be able to be brought under our family private health insurance until the age of 31. As a mother, it gives me comfort that he'll be able to have private health insurance and continue to have choice and opportunity and access to a quicker appointment to make sure his epilepsy is kept under control.

We also know that research shows that individuals who've been introduced to private health insurance have a higher likelihood of renewing their insurance in the future, and I'm hopeful that my son will get used to having his private health insurance and enjoy the benefits, and that, when he gets to the age of 31, he'll be at an age where he wishes to invest in his own health future through private health insurance. We know that our community based rating system relies on the young engaging in a private health insurance scheme.

We've also expanded funding for at-home and community based mental health care, so insurers can pay for non-NDIS services such as payments to mental health nurses and subscriptions to mental health apps. We know the explosion of mental health apps that are now available. It means that people can access them in their homes, remotely, in rural areas and across the suburbs and cities of our country. Mental health apps are a welcome addition to the digital health technology that is exploding around the world. This helps to make it easier for people to access mental health apps, particularly when they may feel they don't want to leave their front door in order to get help.

We've undertaken consultation for expansion of home and community based rehabilitation, to encourage a shift from hospital to home and community based care when it is appropriate for the patient. This is something that I have been a great champion of, through my medical experience in my past profession. Patients do want to be treated in their home, and, if they can get home quicker after being hospitalised, that is something we should continue to support and welcome. In fact, as a paediatrician, Hospital in the Home was pioneered at children's hospitals right across this country and is now being taken up with enthusiasm by the adult sector and, as we can see, the aged-care home sector as well. People want to be in their homes. They want to be supported by the flexibility that home provides for them, and they do have a sense of wellbeing being at home rather than being in a hospital setting.

We've invested $2.4 million for actuarial studies of private health insurance incentives, including lifetime health cover and risk equalisation, to investigate where the incentives to take out and maintain cover are, to encourage insurers to help patients prevent illnesses and so that hospitalisations are at the optimal level. The transparency of out-of-pocket costs has been improved thanks to the Medical Costs Finder website. The website will be enhanced through an investment of $17.1 million, with the Medical Costs Finder tool to collect, validate and publish individual medical specialist fees. I was at the launch of this just before COVID, and I think this has been incredibly welcomed both by consumers and by the medical healthcare system right across Australia.

Since these reforms have been implemented, over 465,000 young Australians have received an aged based discount of up to 10 per cent on their premiums. Over 13,500 policyholders have benefited from improved access to higher benefits for psychiatric care through the government's mental health waiting period exemption, allowing people to upgrade their mental health services without serving a waiting period. Over $160 million in benefits have been paid to achieve this end. An additional 35,000 policyholders in regional areas have received a total of $3.1 million in benefits through improved travel and accommodation to facilitate access. The results speak for themselves.

The act makes provision in relation to the setting and annual indexing of private health insurance income thresholds used to determine government funded rebates announced that may apply to consumers with eligible cover and the Medicare levy surcharge income thresholds and rates. The Medicare levy surcharge is levied on Australian taxpayers who do not have private patient hospital cover and earn above a certain income. The private insurance health rebate is an amount that government contributes towards the costs of singles' and families' private health insurance premiums. The rebate and Medicare levy surcharge are income tested, and that is as it should be. The act describes how annual indexation of private health insurance income thresholds is calculated using an indexation factor. Additionally, it specifies the private health insurance income thresholds for both singles and those in the family status. The act also specifies the formula for applying indexation across the income thresholds each financial year.

The coronavirus pandemic has shown us all the importance of our world-class health system. Indeed, Australia's health system continues to be one of the best in the world. I know Australians knew that before the COVID pandemic, but you can bet your bottom dollar they certainly know it now. Continued investment and reform by the Morrison government into private health insurance proves our commitment to affordable and flexible options for all Australians when choosing private health insurance. This bill goes even further to support Australian families still recovering financially from the height of the COVID-19 pandemic and lockdowns, and my heart goes out to those in Melbourne and Victoria who are actually working through the problems that they deal with in lockdown. This bill reflects the hard work of the Morrison government to ensure the improvement of our private health system is as an accessible, affordable and fair system for all Australians. I commend this bill to the House.

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