Nicola Roxon (Gellibrand, Australian Labor Party, Minister for Health and Ageing) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Health Legislation Amendment (Australian Community Pharmacy Authority and Private Health Insurance) Bill 2010 (the bill) will amend the National Health Act 1953 and the Private Health Insurance Act 2007.

The bill provides for amendments to the National Health Act 1953 to extend the authority of the Pharmacy Location Rules and the Australian Community Pharmacy Authority from 30 June 2010 to 30 June 2015.

The bill also introduces amendments to the Private Health Insurance Act 2007 that will ensure the lifetime health cover policy is applied fairly and consistently to all residents of Australia who are eligible for Medicare. The bill addresses some anomalies currently in the Private Health Insurance Act 2007 that may inadvertently advantage or disadvantage some people with respect to the application of the lifetime health cover policy.

This bill proposes amendments to the National Health Act 1953 relating to the arrangements for approving pharmacists to supply pharmaceutical benefits subsidised by the Commonwealth. These amendments are the result of the Fifth Community Pharmacy Agreement negotiated between the Pharmacy Guild of Australia and the government, and are aimed at ensuring that all Australians, particularly those in rural and remote areas, have reasonable access to the supply of pharmaceutical benefits. Significantly, this bill will extend the operation of the Pharmacy Location Rules and their administration by the Australian Community Pharmacy Authority.

These rules prescribe location based criteria that must be satisfied in order for a pharmacist to obtain approval to supply pharmaceutical benefits at particular premises. Once approved, a pharmacist is entitled to be paid by the Commonwealth for the supply of pharmaceutical benefits. The extension of these rules and its administration by the authority until 30 June 2015 will provide stability in the pharmacy sector and help to ensure that an accessible network of pharmacies exists to dispense pharmaceutical benefits to the Australian public.

The amendments to the National Health Act 1953 will commence on royal assent.

Under lifetime health cover policy, people who do not take out private health insurance hospital cover by their ‘lifetime health cover base day’, as it is known in the act, are required to pay a two per cent loading on their premium for every year they are aged over 30 when first taking out hospital cover. For most people, the lifetime health cover base day is the 1 July following their 31st birthday. The maximum loading a person may be required to pay is 70 per cent and is payable by people who first take out private health insurance hospital cover at age 65 or older.

However, for migrants who enter Australia after 1 July following their 31st birthday, their lifetime health cover base day is the first anniversary after they are registered for full Medicare benefits (their ‘Medicare eligibility day’) and they need to take out private health insurance hospital cover before this date in order to avoid the application of a lifetime health cover loading.

This bill amends the legislation relating to lifetime health cover to ensure it is consistent and fair for all new migrants to Australia who are over 31 years of age and have full access to Medicare benefits. The amendments only apply to people whose lifetime health cover base day falls after 1 July 2010. The amendments do not affect Australian citizens.

The bill resolves some anomalies that currently exist in the present legislation relating to new migrants. Currently, the Private Health Insurance Act 2007 refers to ‘new arrivals’. A ‘new arrival’ must have arrived in Australia for the first time on or after 1 July 2000 and is not an Australian citizen or permanent resident. This has the effect of excluding people who temporarily visited Australia before that time, for example, as a tourist, and of excluding people who migrate to Australia with a permanent residence visa, even though they may be entering Australia for the first time.

The bill removes an anomaly that allows migrants who turned 31 on or before 1 July 2000, and who were overseas on that day, to have access to ‘permitted days without cover’, without ever actually holding private health insurance hospital cover. The Private Health Insurance Act 2007 allows people who hold private health insurance hospital cover to cease their cover in specific circumstances and for a limited period of time without incurring a lifetime health cover loading, known as ‘permitted days without cover’.

‘Permitted days without cover’ are:

• days on which a private health insurer has granted a suspension in accordance with Private Health Insurance (Lifetime Health Cover) Rules;
• days on which the person is overseas for a continual period of more than one year; and
• the first 1,094 days that the person is without hospital cover.

The ‘permitted days without cover’ provision recognises that there may be circumstances when it is difficult or impractical for people to maintain their hospital cover (for example, if facing temporary financial hardship) and is intended to make reasonable allowance for these unforseen eventualities.

Because migrants who turned 31 on or before 1 July 2000 and who were overseas on that day were taken to have private health insurance hospital cover on their ‘lifetime health cover base day’, they have access to a substantially longer period of time (in some cases up to almost four years) instead of the intended 12-month period from their registration for full Medicare benefits in which to take out private health insurance hospital cover without incurring a lifetime health cover loading. The amendment corrects this unintended outcome. Instead, such people will have 12 months from their ‘Medicare eligibility day’, the same as all other migrants, and consistent with the original policy intention.

The amendments in the bill will ensure that in the future, the lifetime health cover provisions have the same effect for all migrants. The change will ensure that the legislation relating to lifetime health cover is consistent and fair for all migrants. Additionally, the amendments will benefit the private health insurance industry by removing inconsistencies, which will result in simplified administrative procedures.

The amendments to the Private Health Insurance Act 2007 commence on 1 July 2010. The amendments do not affect Australian citizens, nor any migrants who have had a ‘lifetime health cover base day’ on or before 30 June 2010.

I commend the bill to the House.

Debate (on motion by Mr Andrews) adjourned.